With a database of 3m customers, Direct Line claims to be the UK's largest private motor insurer. It will sell new and used cars from its website in association with Dixon Motors, the UK's ninth biggest motor retailer. Dixon has a turnover approaching £750m and sells 70,000 cars a year.
Deliveries will be made direct to buyers anywhere in the country, bypassing Dixons' dealerships.
The announcement was made after Dixon Motors' lengthy negotiations with Richard Branson's Virgin Group broke down.
Simon Dixon, Dixon Motors managing director, said: “Our partnership with Direct Line will provide the motorist with the most complete experience both online and in service delivery. Gone are the days of a hard sell - this new motoring website will be a refreshing revolution in motor sales.”
The new online motoring partnership will enable motorists to buy and sell cars initially through the internet. Later, the service will be extended to include WAP (wireless application protocol) mobile phones and in-car telematics.
The website will benefit from the recent heavy promotion of Direct Line's insurance website, directline.com.