Princess of Wales Diana, who died nearly 25 years ago, drove the black Ford Escort RS Turbo for nearly three years from August 1988
Princess Diana preferred to drive her own car and a member of the Royalty Protection Command (otherwise known as SO14) sat in the passenger seat
The car, registration C462FHK, was eventually sold by Silverstone Auctions in Warwickshire to a buyer in Cheshire.
The car sold on Saturday is believed to be unique as the first and only black RS Turbo Series 1 - as agreed between S014 and Ford for reasons of discretion - instead of the usual white manufactured model.
The Leamington Spa-based auction house told people at the sale it was the "car of the day"
Auctioneer Jonathan Humbert said there had been huge interest in the vehicle, which had received the firm's largest number of telephone bids in 12 years.
"This car was known as the 'people's sports car' and the fact it was driven by the People's Princess just nails it."
The bidding began at £100,000 and soon became a contest between hopeful buyers in Dubai and Coventry
A car which was once used by the late Diana, Princess of Wales has sold for £650,000 at auction.