Saga, the over-50s holidays, finance and insurance specialist, has formed an alliance with vehicle management company Velo to offer a one-stop shop car buying service.

Saga Car Direct will initially target Saga's 6.5m-strong customer database with the promise of substantial savings on new cars from Honda, Mazda, Nissan Renault, Rover, Saab and Vauxhall. According to Saga, 150,000 of its customers will buy a new car this year.

The partners claim the shop-by-phone scheme, which went live after six months of trials, will rival prices available from franchised dealers, internet services and overseas retailers.

Sales will be arranged through a network of 1,500 dealers, each franchised by one of Saga Car Direct's carmaker partners. Velo will source vehicles and manage the servicing, maintenance, part-exchange and delivery package.

An internet facility for online ordering and service scheduling is in the final stages of development.

Velo marketing co-ordinator Spencer King described Saga Car Direct as revolutionary.

“It has huge potential,” he said. “It is early days, but several sales have been successfully concluded already. It looks certain to be a success and revolutionise the car buying market.”

All vehicles are UK-sourced and the average delivery time is 12 weeks. Velo says that agreements with the seven car manufacturers signed up to the scheme do not place limitations on colour, model or specification.

The package offered to Saga customers – predominantly ABC1 – includes price transparency, door-to-door test drives, a variety of finance and payment options, and fixed cost service and maintenance.