The car was sold Friday at the Goodwood Festival of Speed Auction in Chichester, CNBC reported.
Bonham's said the winning bid was $26.45 million, but with the buyer's premium the total price was $29.6 million.
The previous record for the most expensive car sold at auction was a 1957 Ferrari 250 Testa Rossa Prototype, which went for $16.39 million at Gooding & Company's 2011 Pebble Beach Auction.
The Mercedes, which raced in five World Championship-qualifying Grand Prix races, was retired in 1955.
It has been displayed in museums in Germany and France.
Jonathan Klinger of Hagerty, the collectible-car insurance firm, said the car is very special.
"It's not like another one will come down the road for sale," he said.