On August 14, 2014, under a marquee on a California golf course, the crème de la crème of classic car enthusiasts gathered from around the world to witness the sale of a scarlet 1962 Ferrari 250 GTO Berlinetta—one of only 39 ever built.

For a couple of decades, the GTO, with an original sticker price of US$18,000, has been the holy grail of multi-millionaire car collectors such as fashion mogul Ralph Lauren, Pink Floyd drummer Nick Mason and Walmart heir Rob Walton. As examples rarely make an appearance on the market, the excitement and anticipation in the marquee was positively buzzing.

Robert Brooks of Bonhams started taking bids in US$1 million increments. At US$34m, bids started to ease off. The auctioneer scanned faces in the crowd and asked pointedly, “When is the next time a GTO will be at auction—and will the next one be any less?”

Eventually, the hammer came down at US$38.1m, a new auction record for a classic car. The identity of the bidder was not disclosed. That’s a whole lot of money for 880kg of hand-beaten metal, a 300bhp V12 engine and some lovingly restored leather.

But this—or another Ferrari, Bugatti, Porsche or Mercedes-Benz—could be a safer investment than stocks, gold or property. For the biggest returns at present, bet on red and sporty. According to the Historic Automobile Group, which tracks and publishes prices, the cost of top-end classics from Ferrari rose 33.6 per cent in the past 12 months (compared to last year’s startling 55 per cent) and Porsche saw prices for classics up 18.5 per cent in the year ended July 2014.

Traditionally, the sportiest models have been purchased out of a yearning for romance and adrenalin. But the sharp and steady increase in prices has inevitably led to a different clientele attending auctions—some more obsessed with return on investment than the open road.

For example, the record-breaking Ferrari 250 GTO sold by Bonhams in August had been owned by one wealthy Italian scion for five decades—Fabrizio Violati’s estate sold it and 72 other cars to an investor group, which in turn put the GTO up for auction two months later.

A number of private equity firms have also been established in recent years to invest specifically in classic cars. PHD Equity Partners, for example, has launched a fund alongside auctioneers H&H Classics to acquire vehicles worth more than US$500,000; investors are allowed to share the cars at glamorous automotive events and on special driving days.

Aside from the investment potential, you can’t ignore the fun factor. When you received your first pay cheque, did you lust after stocks and bonds? Of course not; you dreamed of the day you would get behind the wheel of a Maserati.

For many investors, part of the appeal of owning a classic car is joining prestigious car clubs and attending rallies around the world, such as Pebble Beach in California, Mille Miglia in Italy and Goodwood Revival in England. Ownership allows you to live out your dreams—and make a mint while doing it.

Alain Li, the Hong Kong-based Asia-Pacific CEO of Richemont, bought his first classic soon after he started his first job in London. It was an Alfa Romeo Duetto Spider. Now his collection includes a 1955 Mercedes-Benz 300SL, a brace of iconic Jaguars and five significant Ferraris from the 70s and 80s.

“I have never bought a car as an investment,” he says. “However, I’ve been fortunate that, in the last few years, the value of the cars has risen and more than paid for their upkeep.” For many collectors, a personal connection is key. “I had wanted a Ferrari Dino since I was 12, in silver with a black interior,” recalls Li.

“I stumbled upon one exactly like that in Milan. It had just 8,000 miles on the clock and I bought it from its second owner. It had all the original books, tools, keys—the owner had even kept every sparkplug that had been replaced.”

But he advises prospective buyers to get cars thoroughly checked first. “The Duetto was a good lesson in that respect. It was fine mechanically, but the body panels were stuffed with filler. Basically it was a rust bucket. I had it put right and enjoyed it for the summer, but since then I make sure every car I buy has been inspected by a specialist.”

Peter Wallman, a classic-car expert for RM Auctions, explains what makes one vehicle more desirable than another. “It’s the marque, rarity, usability, originality, provenance and condition. There’s a certain amount of fashion involved.

Most customers are now of an age where cars from the 50s, 60s and 70s were what they lusted after when they were young—and now they can afford them.” He continues, “Ferraris will never go out of style. As a brand, it still maintains its authority and sex appeal like the early days. It has the romance of it being Italian and the passion that invokes, and the fact that Ferrari still competes in Formula One is significant. To this day they still build the best supercars, in very low numbers.”

Should the car have had a famous owner behind the wheel, chances are it’s going to balloon in value—particularly if it rested in the hands of actor and car collector Steve McQueen. Three years ago, RM sold the 1970 Porsche 911S that McQueen drove in the opening scene of the 1971 film Le Mans for US$1.38m, though the book value for a standard model at the time was US$55,000.

One of the cars at Bonhams this August was the movie star’s 1967 Ferrari 275 GTB/4, which sold for US$10.2m; similar cars unassociated with celebrities have gone for about US$3.7m.

The fact McQueen took delivery of the latter car on the set of Bullitt adds to its cachet. Road & Track magazine contributor Colin Comer explains that a car needs a story as well as a big name to pump up the price.

“Elvis Presley owned hundreds of cars, so it doesn’t really matter if he bought a 1975 Cadillac and gave it to his manager. But take Elvis’s yellow 1971 De Tomaso Pantera; it was a notoriously unreliable car and wouldn’t start one day, so he took a pistol and shot it full of holes. That increased the value quite a bit.”

Owning a classic car isn’t an investment you sit on—it’s one you sit in. While you’re holding out for the best price, you can hold on through some high-speed turns. Surely you’re getting the best of both worlds.

Also read, Financial Friday: Investing in rare toys.