The world record for an automobile at auction was broken for the fifth time in six years on Thursday evening (August 14, 2014) when a 1963 Ferrari 250 GTO sold at Bonham's Quail Auction for US$34,650,000 (US$38,115,000 including buyers premium).
The Ferrari's price surpassed the existing record of £20,896,800 (US31,561,205) for Juan Manuel Fangio's 1954 Mercedes-Benz W196 R F1 car, which sold at Bonhams' Goodwood Festival of Speed Auction in August, 2013.
The sale of the GTO also returned the automotive auction record to Ferrari on the 26th anniversary of the death of "Il Commendatore" (Enzo Ferrari), a figure whose cars now dominate the rare car market more than they have dominated motorsport over the last eight decades.
The first sale at auction of a Ferrari 250 GTO for many years had created intense international interest, with the record almost certain to be broken and many believing the GTO might double the Mercedes-Benz record of just twelve months ago. In the end, it increased the record by nearly 30 percent, but that doesn't nearly reflect the dominance of the Ferrari marque in the collectible car market.
Just 10 cars from the very special Maranello Rosso Collection were auctioned by Bonhams on Thursday evening prior to a further four major auctions over the next two days: Gooding's official Pebble Beach auction (August 16 -17), RM Auctions' Monterey Sale (August 15 -16), Mecum's Monterey Sale (August 14 -16) and Bonhams' continuing Quail Lodge Auction (August 14 -15).
With the 250 GTO breaking the world record price, a further three of the 10 Ferraris auctioned on Thursday evening achieved prices that pushed them into the top 100 most valuable cars ever sold at auction, meaning that as Friday morning dawned, Ferrari cars made up 48 (48 percent) of the top 100. With four auctions to go, by Sunday evening, Ferraris will almost certainly make up more than half that top 100.
Watch for our complete rundown of the top 100 cars sold at auction next week on Gizmag.com where we'll explain why rare Ferraris in particular (but Mercedes-Benz, Porsche and other collectible cars are now "Better than Gold," as the world's foremost authority on automotive investing, Dietrich Hatlapa of the Historic Automobile Group International (HAGI) explains in his landmark book.
Gizmag's Angus MacKenzie was on hand to witness the historic event, reporting that the audience was massive, with bidders from around the world in attendance not just in the pavilion, but also on telephones, and overflowing onto the lawns outside.
"The atmosphere was understandably quite thrilling", said Angus, "but I suspect that with all the expectations based on the private GTO sales that had been reported, the US$38 million price was seen by many as an anticlimax, rather than the record-smashing event it really was."
"Bonhams really knows how to entertain an audience, and the auctioneer spent a long time working it to get an extra US$450,000.
"Given that Fangio's Silver Arrow nearly doubled the previous record just 12 months ago, expecting it to double again was probably asking a bit much. In the end, the car was "well bought" and the record rose by another 30 percent with the result a congruent reflection on the collectible car market right now. It's at boiling point and HNWI are suddenly realizing that you can have your cake and eat it too – it's possible to own your dream car and have it appreciate better than putting your money into a superannuation fund."
Why the GTO is such a sought after automobile
This outline of the Ferrari 250 GTO comes largely from our preview of the event, but for those who haven't read it:
The Ferrari 250 GTO was developed to contest the 1962 3-liter class FIA GT World Championship series and was produced in limited quantities from 1962 to 1964 for homologation into the FIA's Group 3 Grand Touring Car category – GTO stands for "Gran Turismo Omologato," Italian for "Grand Touring Homologated."
Thirty-six cars were made in 1962 and 1963, and in 1964 a "Series II" was introduced, which had a slightly different look. Three such cars were made, and four older "Series I" were given a "Series II" body. It brought the total of GTOs produced to 39. The Ferrari 250 GTO won the World title both seasons in succession.
Like most racing vehicles, once it's competitiveness dropped away, it's value also dropped away and for much of the 70s, a GTO could be procured quite cheaply (under $10,000) considering what it was. Once vintage racing began to become popular though, it's price began to appreciate rapidly and the conflicting issues of supply and demand have conspired to drive the price ever upwards since.
When new, the GTO commanded an US$18,000 purchase price in the US, and buyers had to be personally approved by Enzo Ferrari and his dealer for North America, Luigi Chinetti.
In 2004, Sports Car International placed the 250 GTO eighth on a list of Top Sports Cars of the 1960s, and nominated it the top sports car of all time. Similarly, Motor Trend Classic placed the 250 GTO first on a list of the "Greatest Ferraris of all time."
GTOs almost never come up at auction. They change hands privately and they keep pushing the unofficial world record price for an automobile ever skyward. As the people that own them are watching their beloved cars appreciate in value, the amount of money required to get them to even consider parting with their cars has grown dramatically.
Though there is no "official" way of verifying this, (while auction prices are publicly available, private sales are not necessarily reported), the phenomenal figures achieved by private sales of GTOs are increasingly being reported in the media.
According to media reports, in February 2012, a 1964 Ferrari 250 GTO became the most expensive car ever sold, fetching $32 million. Then, just a few months later, a 1962 GTO sold for $35 million.
Then more media reports indicate that a 1963 GTO sold this time last year for $52 million. Hence the current record for a car at auction of $31 million, achieved in 2013 for Juan Manuel Fangio's Mercedes-Benz Silver Arrow, is likely to be comprehensively gazzumped when the RM Auctions hammer falls later this week.
The owners of GTOs these days are hyper-enthusiasts and hyper-wealthy. Owners include Fashion designer Ralph Lauren, American communications magnate Craig McCaw, Pink Floyd drummer Nick Mason, S. Rob Walton (Walmart Chairman), Jon Shirley (former Microsoft president), Baron Bamford (knighted at 45 years of age and owner of JCB a multinational), Greg Whitten (former chief software architect at Microsoft), Christopher Cox (former chairman of the U.S. Securities and Exchange Commission) and Baron Laidlaw (105th richest person in the UK).
A few years ago, UK radio and TV personality Chris Evans wrote a rather prophetic newspaper article entitled, "Why the Ferrari 250 GTO is the best possible investment."
Evans subsequently purchased a GTO, then sold it for a reported $18 million a few years later, enabling him to replenish the cash reserves and subsequently pick up the world's most expensive car ever to sell at auction (a Ferrari California Spider once owned by Hollywood actor James Coburn) a few years back.
Is this the world's most valuable car?
There will be a lot of newspaper articles proclaiming the Ferrari 250GTO as the world's most valuable car, which it most certainly is not.
It just happens to be the most valuable car that has recently been sold. There are more than a few 250 GTOs out there, and there are much rarer, more valuable cars which may never be sold at auction. If the Bugatti Royale Kellner Coupe ever hit the auction block again, it would immediately jump to the top of the list.
In May 2010, Gooding & Company handled the private sale of a 1936 Bugatti 57SC Atlantic for more than $30 million, which at the time, was believed to be the highest price ever paid for a car. Neither the exact price nor the buyer were disclosed, and it's interesting to note that so beloved are many of the cars in the collector stratosphere that owners would often rather see the car go to a good home than to the buyer with the most money.
The Atlantic was derived from Bugatti’s fabled prototype Aerolithe Electron Coupé, which was shown at the 1935 Paris Auto Salon. Only three Atlantics were made, and only two still exist (the other is owned by fashion designer Ralph Lauren).
Several Bugatti Aerolithe Electron Coupé concept cars are believed to have been built, but no-one knows where they are, or at least they're not telling anyone. If one of those might surface one day, it would command a world record price.
So while the GTO is the world's most valuable car ever sold at auction, and also believed to be the most valuable car ever sold privately, there will be other cars that take those records, perhaps sooner than anyone expects. There's debate in the office ranks as to whether the GTO's record will last 48 hours as there were only three hand-built Ferrari 275 GTB/Cs ever made and ... history is in the making.