"I binned them all, you're absolutely right, because in my time they were most of them ugly and for me useless," said the Austrian, now non-executive chairman of Hamilton's Mercedes team.
"On this point of view Lewis is right because the trophy should have a certain value when you look at them, that you like them," Lauda told BBC radio at the British Grand Prix on Saturday.
Lauda, who took his titles with McLaren and Ferrari and won 25 grands prix from 1974, said he had given trophies to his local garageman.
"I said 'If you give me a free car wash for the rest of my life you can have all of them', and that is what I did," said the 66-year-old.
"The guy died unfortunately and his son was running the petrol station but they were so demolished and terribly kept there, that a friend of mine took them away, polished them and then my kids took them and put them on eBay.
"Now I have to pay for it (the car wash)."
Hamilton told reporters earlier in the week that he wanted to get his hands on a proper trophy if he won his home race on Sunday.
"Last year they gave me this plastic thing and I'm like, 'This is not the trophy, it's like a GP2 trophy not the Formula One trophy'," said the double world champion.
"The last one in Austria was wooden, the whole thing was wooden. The base was like lead. I mean, what? It's supposed to be silver."
The Briton qualified on pole on Saturday.
(Editing by Tony Jimenez)
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