What makes a car worth $10 million?
If you purchased a new car recently, you know just how expensive they can be. As reported Tuesday, the average price paid for a new cars in the U.S. was $34,112 in January, according to Kelley Blue Book.
For many that's a stunning sum that will require years and years of monthly payments to pay off. But it pales in comparison to the $9.9 million paid for a vintage German luxury car at auction last week in Arizona. The nearly $10 million price tag for the 1937 Mercedes-Benz 540K Special Roadster is the highest paid for a car at a RM Sotheby Arizona auction, surpassing the $9.6 million a 1964 Ferrari 250 LM brought at the same auction last year.
If $10 million seems a princely (and unfathomable) amount to pay for a mere car, consider the Mercedes sold at this year's auction fell shy of its projected $10 million to $13 million sale price.
So what makes a car worth $10 million?
Numerous factors play into determining a vintage car's worth. Topping considerations is just how rare the vehicle is. For example, the Mercedes 540K sold last week was an early pre-production model -- just 419 were built. The car also has several unique features sought by investors, including "high doors" and a swooping "longtail" rear-end design, and it's one of only a handful of other similar models known to exist.
Age is also a key factor. In general, the older a car is, the higher its potential asking price can be. What's more, an older version of a classic car is likely to command a higher price than a new model, all other factors considered equal.
The vehicle's condition also weighs heavily in determining a classic car's value, including such things as the number of miles on the odometer, amount of original equipment, and any restoration that's been done or may be needed. Such criteria are yet more reasons the Mercedes was able to command such a price. Despite its age, it's believed to have been driven fewer than 11,000 miles, and retains its original engine and transmission.
Another consideration is a vehicle's history. A meticulous paper trail of original and previous owners, as well as maintenance performed on a classic car can add considerable value. The Mercedes 540K, for example, is believed to have been first purchased by Reginald Sinclaire of Larkspur, Colorado, an heir of one of the founders of Corning Glass, according to RM Sotheby's. The car subsequently had six more documented owners prior to Friday's auction, providing potential bidders with insight to the car's whereabouts and thus its potential value.
Still, there are other factors, known as intangibles, that weigh heavily in determining the asking price and ultimate winning bid price for a vintage automobile. Some collectors prize original condition over restoration, for example. So the perceived value of a classic car often depends on the collector, and his or her values.
If you're weighing bidding on a classic car (or simply curious about how much vintage cars can go for), Sotheby's continues it 2016 automobile auction season Wednesday in Paris. Among the 61 vehicles offered for sale is a 1971 Ferrari 365 GTB/4 Daytona Berlinetta, valued at an estimated $760,000 to $900,000.
Not quite as much as the vintage Mercedes 540K. Then again, who knows exactly how much it'll fetch.
Correction: The Paris Sotheby's auction is Wednesday, Feb. 3, 2016.