Direct Line moves into car retailing

The Direct Line Group is investing £50m into selling new and used cars on the internet. The website will be closely aligned with directline.com, its online insurance business, and will involve partnerships with other motoring providers.

On the new site, visitors can search for cars, basing their decision on continuously updated car reviews, and participate in online auctions. They can also browse and buy car-related merchandise.

Ian Chippendale, Direct Line group chief executive, said: “Owning this online motoring site will create opportunities for the Direct Line Group to generate a whole new income stream and attract new customers.”

Direct Line is the UK's largest private motor insurer. Following the £220m acquisition of Green Flag last October, it is also the third largest breakdown organisation. Its online motor retailing will initially be through the internet but will later be formatted, allowing users to access it through multi-channel sources including WAP mobile phones and in-car telematics.

Direct Line has not yet revealed where it will source its cars. Options include supply direct from the manufacturers or an importer. A more likely short-term fix is supply from UK franchised dealers.