The new unit, Motordirect, is promising instant highly competitive quotes on most makes and models of car over the telephone or via the Web, including trade-ins and free delivery and collection to anywhere in mainland UK.

Mark Stokes, customer relationship director, Lloyds TSB Asset Finance, says: "Lloyds TSB Motordirect is a new service which aims to offer our customers cars at prices that are hard to beat. Going beyond competitive pricing Motordirect also helps customers to buy the vehicle of their choice quickly and easily, with no need to haggle to secure a good deal, or worry about hidden extras."

He says that Lloyds will have a limited margin on car sales but will look to make its money through financing. Many of the cars on the virtual lot will be sourced from the company's contract hire business.

The pilot will run until March next year. If it proves popular with customers it will be extended into Lloyds TSB branches.

The Lloyds TSB launch comes a week after Alliance & Leicester unveiled smartermotoring.com, a new Web site which promises a one-stop shop for anyone buying or selling cars. The UK bank, which compiles a well-regarded monthly car price index, launched the site in conjunction with a number of independent third parties, including What Car? magazine, the Reg Vardy dealership network, used car franchise Fish4Cars, online car retailer Autobytel, and CAP Network for vehicle data and valuations.

Other rivals include Jamjar.com, a joint venture between insurer Direct Line and the Dixon Motor dealership, which is claiming 1000 car sales in August when the new number plates were introduced.