Lifestyle

Protect your passion: Make the most of your car collection

Apr 10, 2025

You’ve devoted a lot of time and energy to collecting cars—but have you done enough to safeguard your wealth and privacy?

At J.P. Morgan Private Bank, we work to help you experience the full spectrum of what your wealth can create. Of course, your wealth does not define you, even as it can help you achieve your unique ambitions and passions. Be intentional. Make sure that your particular passions are an integral part of your holistic wealth plan.

Collectors are generally known for their passionate enthusiasm—whether they’re acquiring Picasso lithographs or rare first edition books. Among the most fervent of collector groups are auto collectors. At Monterey Car Week 2023, RM Sotheby’s shocked the automotive world by unveiling an assembly of blue-chip Ferraris that were discovered in varying states of disrepair due to Hurricane Charley in 2004. The auction commanded a total of over $17 million, reflecting the undiminished appeal of these rare and treasured Ferraris2.

If you are one such enthusiast, you are not alone. Professionals estimate that there are about 43 million collector vehicles in the United States. The combined value of those 43 million collector cars represents an estimated $1 trillion in total insurable value.1 But while enthusiasm for cars is well understood, how a car collection can fit into a larger wealth picture may be more opaque. 

At J.P. Morgan Private Bank, we encourage you to be intentional about your plan, and we are ready to help you make the most of your passion. Here are some of the key considerations for your treasured collection: 

  • Safeguard your wealth and privacy with an LLC 
  • Set aside funds to maintain the collection
  • Prepare an exit strategy: Consider establishing a trust or foundation

Consider an LLC to safeguard your wealth and privacy

A large collection can attract attention—some wanted, some less so. In a world of social media and cybersecurity risks, owning your collection in an LLC structure can make a lot of sense. 

If you are a collector who buys vintage cars in your own name, that information is more than likely publicly discoverable. What you bought and when, as well as the prices you paid—all are exposed to whomever takes the time to look. In contrast, if you buy your cars through an entity such as an LLC that does not bear your name, you can maintain discretion and privacy. 

An LLC structure can also help protect you in the event of an accident. Imagine this scenario. A collector decides, for charity, to auction off to the highest bidder the opportunity to get behind the wheel of a vintage car that he owns in his own name. During the brief drive an accident occurs, resulting in damage and injuries. The owner of the car collection could be held personally liable for all damages and uncovered medical expenses, leaving the collection and other assets exposed. 

Set aside funds to maintain the collection

Some collectors view their collections as part of their legacies, and wish them to remain intact even when they are no longer around to enjoy them. But collections are often liquidated or dismantled for one of two reasons: to pay taxes when the collections are passed to heirs, or when it proves too costly to properly maintain the fleet. Using a multi-generational vehicle such as a trust may reduce the tax burden, and also allow you to put money aside for general maintenance, insurance and storage of your vehicles. Perhaps the car collection is housed in a barn. You may want money for future capital improvements to the structure—during and potentially beyond your own lifetime. 

Establish an exit strategy or succession plan

An important generational shift is underway. It’s likely to result in the largest transfer of assets in history, and the car market is not immune. It is estimated that baby boomers own 60% of the collectible market, but millennials are now the more active buyers3

As this shift continues, it is important to be thoughtful and intentional about your collection’s future. Might you one day want to sell your collection? And what should be done after you pass? Do you want the collection to remain intact? Or would you prefer that your heirs decide which cars to sell or keep? Whatever you decide, you want to be sure your wishes will be honored. 

Say that you’ve determined to place your car collection in some kind of a structure. You can choose a foundation or trust. Both methods are forms of tax mitigation, but also ensure that the wishes of your legacy are followed properly. Here are two case studies of collectors who made different choices:

1.  Private Operating Foundation

U.S. collector John owned an extensive collection of 40 iconic cars valued at $50 million. He opted to set up a private operating foundation, which then owned the cars. About $10 million in liquid assets was earmarked for collection maintenance. John wanted to be sure that his vehicles could be displayed at various car shows around the world, and the private foundation helped make that possible.

His financial and estate advisors explained that an operating foundation must satisfy certain conditions, but once satisfied, the tax benefits are simple. The operating foundation is federally tax exempt, so John could make gifts to the foundation and pay no gift tax, and also receive an income tax deduction. If the assets of the operating foundation generated income, only a modest excise tax would apply. And when John died, there would be no estate tax to be paid on the foundation’s assets. All in all, on his $60 million foundation, John reduced his gift and estate tax liability by $24 million.

2.  Trusts and LLCs

Collector Joan opted to have an LLC own the cars, and she put the LLC shares equally into trusts benefiting her children. A trustee provided management and oversight of the LLC and vehicles. Like John, Joan placed $10 million in liquid assets in the LLC to generate income to cover vehicle expenses. When she gifted the LLC shares to the trusts, she retained some control over the management of the cars. This reduced the value of the gift, enabling Joan to make a meaningful reduction in her gift and estate tax liability. When Joan passes away, the interest she retained to control the management of the vehicles could be transferred directly to her descendants or to the trust, allowing the trustee to assume full responsibility for the collection.

We can help

What strategy might work best for you and your collection? Your J.P. Morgan team is available to work with you, your tax advisor and your estate planning lawyers to help you get the most out of your car collection.

Sources:

1 https://www.hagertyagent.com/resources/hagerty-insights/the-collector-car-market-by-the-numbers

2 https://news.dupontregistry.com/ferrari/rm-sothebys-lost-found-ferrari-collection-results/

3 https://www.classicins.com/blog/baby-boomers-sell-classic-car-collections-classic

 

Contact us to discuss how we can help you experience the full possibility of your wealth.

Please tell us about yourself, and our team will contact you. 

*Required Fields

Contact us to discuss how we can help you experience the full possibility of your wealth.

Please tell us about yourself, and our team will contact you. 

Enter your First Name

> or < are not allowed

Only 40 characters allowed

Enter your Last Name

> or < are not allowed

Only 40 characters allowed

Select your country of residence

Enter valid street address

> or < are not allowed

Only 150 characters allowed

Enter your city

> or < are not allowed

Only 35 characters allowed

Select your state

> or < are not allowed

Enter your ZIP code

Please Enter a valid Zip Code

> or < are not allowed

Only 10 characters allowed

Enter your postal code

Please Enter a valid Zip Code

> or < are not allowed

Only 10 characters allowed

Enter your phone number

Please enter a valid phone number

Tell Us More About You

0/1000

Only 1000 characters allowed

> or < are not allowed

Checkbox is not selected

Important Information

All case studies are shown for illustrative purposes only, and are hypothetical. Any name referenced is fictional. Information is not a guarantee of future results.

JPMorgan Chase & Co., its affiliates, and employees do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal and accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transaction.

This material is for informational purposes only, and may inform you of certain products and services offered by private banking businesses, part of JPMorgan Chase & Co. (“JPM”). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. Please read all Important Information.

General Risks & Considerations

Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g., equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan team.

Non-Reliance

Certain information contained in this material is believed to be reliable; however, JPM does not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. No representation or warranty should be made with regard to any computations, graphs, tables, diagrams or commentary in this material, which are provided for illustration/ reference purposes only. The views, opinions, estimates and strategies expressed in this material constitute our judgment based on current market conditions and are subject to change without notice. JPM assumes no duty to update any information in this material in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of JPM, views expressed for other purposes or in other contexts, and this material should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward-looking statements should not be considered as guarantees or predictions of future events.

Nothing in this document shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions.

LEARN MORE About Our Firm and Investment Professionals Through FINRA BrokerCheck

 

To learn more about J.P. Morgan’s investment business, including our accounts, products and services, as well as our relationship with you, please review our J.P. Morgan Securities LLC Form CRS and Guide to Investment Services and Brokerage Products

 

JPMorgan Chase Bank, N.A. and its affiliates (collectively "JPMCB") offer investment products, which may include bank-managed accounts and custody, as part of its trust and fiduciary services. Other investment products and services, such as brokerage and advisory accounts, are offered through J.P. Morgan Securities LLC ("JPMS"), a member of FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

 

Please read the Legal Disclaimer for J.P. Morgan Private Bank regional affiliates and other important information in conjunction with these pages.

INVESTMENT AND INSURANCE PRODUCTS ARE: • NOT FDIC INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, JPMORGAN CHASE BANK, N.A. OR ANY OF ITS AFFILIATES • SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED

Bank deposit products, such as checking, savings and bank lending and related services are offered by JPMorgan Chase Bank, N.A. Member FDIC.

Not a commitment to lend. All extensions of credit are subject to credit approval.

Equal Housing Lender Logo