The bank's leasing and fleet management operation Lloyds TSB autolease will provide back office facilities for the new venture, called Motordirect.
Customers will be able to secure quotes for cars and buy them over the telephone or through the Motordirect website, with the bank promising a haggle-free price with no hidden extras, a trade-in service with free collection and free delivery of the new car anywhere in the UK. It is not, however, advertising service and maintenance packages.
Motordirect aims to increase Lloyds TSB's share of motor finance, although the technicalities of the Consumer Credit Act mean customers can request a quote and then buy the car at the bank's advertised price without using the bank's funding.
The bank denies, however, that it plans to rival online car buying sites like Autobytel and Jamjar, insisting that all the cars will be sourced through UK dealers. The pilot will run until March, and if it proves successful will be extended to Lloyds TSB branches.