LONDON (Reuters) - The world's oldest surviving Rolls-Royce revved up two new records on Monday when a private British collector paid 3.5 million pounds ($7.22 million) for it at auction.

The price makes the veteran vehicle not only the most ever paid for a pre-1905 car but also the most for a Rolls-Royce.

"They opened the bidding at one million and it soared from there. In the end it came down to a battle between two telephone bidders," a spokeswoman for auction house Bonhams said.

The previous record for a veteran car was the 1.76 million pounds paid for an 1884 De Dion Bouton, while that for a Rolls-Royce was the 1.48 million pounds paid for a 1912 Silver Ghost Double Pullman Limousine

Built in 1904, car 20154, a small 10 horsepower open-topped two-seater, is only the fourth vehicle produced by the landmark cooperation between Charles Rolls and Henry Royce and the oldest one still running.

"It is in perfect condition after loving restoration in the 1950s. 20154 is a runner. The purchaser could get in and drive it away," said Tim Schofield, head of UK motor sales.

"You would just need to tickle the carburettor, make sure the battery has a bit of life in it, remove the sleeve from the starter handle and give it a couple of turns," he told Reuters.

The car -- licence plate U 44 -- was first exhibited at The Paris Salon in the late Autumn of 1904.

Rolls-Royce records confirm delivery from the Manchester Works in November that year, and it was displayed at the Olympia Show in London in February 1905.

That year it was briefly driven by a Doctor Briggs -- probably as a trial -- before passing to Kenneth Gillies of Tain in Scotland.

Some while later it was given to Percy Binns of Harrogate, Yorkshire, as a 21st birthday present.

He owned it for 30 years but neglected it until 1950 when it was seen and acquired from him by Rolls-Royce enthusiast and speedway star Oliver Langton who restored it to its red leather and gleaming brass glory.

"This car is the only Rolls-Royce qualifying on the basis of its pre-1905 date to take part in the London to Brighton Veteran Car Run, which makes it extra special," said Schofield.

It first ran the prestigious rally in 1954.

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