I purchased a car from a main dealer who has retained the V5C for two months because it is a demo car. The dealer is also paying the tax during this period. I have read on another motoring website that unless I am paying the tax, my insurance is invalid. The dealer is adamant that this is all above board and legal, but I'm no longer convinced since I read about my insurance being invalidated. Are there any implications of the tax not being in my name?

The only document I have is an invoice from the main dealer saying I have purchased the car first month tax paid. When I collected the car, the dealer said "good news, we've actually taxed it for three months, we'll send you the V5C then".