Million dollar cars are a dime a dozen these days in the collector world. Nearly 1,400 cars have sold for more than a million dollars at auction, but until earlier this week, only 25 cars had ever sold at auction for more than US$10 million.
- On Wednesday evening, a 1960 Ferrari 250 GT short-wheelbase (SWB) Berlinetta (chassis 1995 GT – one just 167), sold for $7,392,000. The car had been donated from the estate of pre-eminent British V12 Ferrari collector, Richard Colton, to benefit the Royal National Lifeboat Institution (UK). With an exchange rate of 1.54758854, that gave the car a sale price of $11,439,774, making it the 26th car in history to sell for beyond the magical mark.
Ten million dollar cars tend to self-select their owners. You cannot own a ten million dollar car without being absurdly wealthy. Ten million dollar car buyers hail exclusively from the tribal group known as Ultra High Net Worth Individuals (UHNWI), most of whom also have a very large diversified investment portfolio.
There is a growing global trend for younger, less traditional UNHWI to diversify their asset portfolios into "investments of passion" such as collectible cars, sports memorabilia, vintage guitars and motorcycles.
One of the beauties of investing in rare Ferraris (apart from the astonishing appreciation in value), is that you also get to enjoy this investment by driving, riding or playing with your hyper-expensive toy. This seems like a fine alternative to having shares or any other intangible investment which is notionally little more than a set of numbers on a spreadsheet. All share certificates are the same, but blipping a V12 with the same accelerator pedal used by Fangio, or holding the same handlebars once gripped by Mike Hailwood, or strumming a few chords on one of Eric Clapton's guitars before bedtime adds some real sizzle to an investment.
Buying one of these cars also grants admittance to some very exclusive experiences. A car like this gets you immediate entry into any major historic event you wish – from concours to racetrack and everything in between, anywhere in the world. You'll also need a climate-controlled garage and the willingness AND the financial wherewithal to occasionally lavish it with enough attention to make a Princess blush. Share certificates are much safer investments if you intend to sample the goodies though, as driving your $10 million dollar investment makes it precariously vulnerable in the eyes of insurance companies, so you'll also pay a substantial insurance premium each year. As a general rule of thumb, there are more frictional losses in this form of passionate investment than in the world of stocks and bonds.
We reflected on the accessibility of such cars in our preview of Monterey Car Week. This is big money. $10 million will also buy you an island. It will buy you a house on any street in the world. Last year 1,600 people in London paid more than $5 million for a house in London alone. Just three people paid $10 million for a car last year in the whole world.
If you earn enough to save $50,000 a year after tax, it'll take you 200 years to save enough for one of these cars, 760 years in the case of the GTO record holder, but the bad news is it'll be worth a lot more by then.
Here’s the list of cars that have achieved that feat, and if you follow the links, you’ll see they are astonishingly beautiful, rare and usually have a storied history featuring prominent people. We keep an entire Top 100 list with descriptions and links on Gizmag and we're in the process of mining data to provide a great deal more perspective on the elite collectible car market, not to mention informed buying information for investors.
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