Thirty million dollars…for a car?! Believe it or not, that magic $30 million mark hits the spot where several super-high-end historic cars are being bought and sold today.
The nearly $30 million Mercedes
Two highly publicized sales this year have redefined the extreme upper spectrum of the vintage car market. In July, at a Bonhams auction in the United Kingdom, a 1954 Mercedes W196R Grand Prix racing car became the most expensive car ever sold publicly; it sold for approximately $29.6 million.
Why so much? This Mercedes was the Holy Grail of cars, the automotive equivalent of the space shuttle that landed on the moon. It was exceptionally original and had a very clear and important history even when new. Driving this very car, world champion Juan Manuel Fangio scored two Formula One Grand Prix victories in 1954 for Mercedes-Benz, a major contribution to what ultimately became a World Driving Championship year for him personally—in an era when Mercedes cars were at the pinnacle of success in international motorsport. It helped that the car Bonhams sold is the only such car in existence that is not owned either by an institutional museum or by Mercedes-Benz—you simply cannot go out and buy another!
These days, super-high-end cars—those valued in the multi-millions of dollars—have taken on the characteristics of super-high-end art. Viewed as an asset class rather than as automobiles, many of these cars are now traded among investors and institutions. For many long-term owners, they have simply become too valuable to keep.
The prices might seem crazy, but compared to high-end art, they are not really that high. The best Picasso and Cézanne paintings trade well into the multi-hundreds of millions, so surely a car-as-art and, indeed, an important historical artifact (such as the Mercedes W196) should be worth a fraction of that—don’t you agree?
Almost as much for a Ferrari
RM Auctions wasted no time in posting a similarly impressive $27.5 million sale of a 1967 Ferrari 275 GTB/4*S N.A.R.T. Spider at its recent August Monterey auction. Since the sale was just shy of the title “world’s most expensive car sold at auction,” set by Bonhams, RM, therefore, claimed the title “most valuable road-going car sold at auction”—a nod to the fact that the Mercedes W196 is a pure racing machine in every respect. It’s a car that would require a full team of engineers from Mercedes-Benz just to start it up, much less run it around a race track at speed!
The result for RM’s Ferrari seems a little crazy. The car was very special—yes, Steve McQueen owned a similar car—but it was not unique. It was one of ten such cars made. In 2005, another one of the ten sold at auction for just under $4 million. The $27.5 million car that recently sold was no more special. How to explain it, then?
Better than gold?
During the Monterey Car Week festivities in August, a close friend handed me a copy of the book, Better than Gold: Investing in Historic Cars. As the title implies, the book explains in exhaustive detail why investing in historic cars can, in fact, be “better than gold.” Well, is it true? The two sales noted above certainly make those words seem to be true.
Special cars, like pieces of artwork, are affairs of the heart for the collectors who cherish them. They will be subject to certain trends of fashion and bigger market conditions but, as with any collectible, they’ll always be worth “whatever the next guy wants to pay.”
David Swig is a car enthusiast and a regular participant in historic car activities, including circuit racing, road tours, and Concours d’Elegance. He is an expert on specialty collector cars, especially sports racing cars (1950s thru 1980s). David and his brother, Howard, are carrying on the California Mille for their father, Martin, who founded the car tour in