With so many cars to choose from on the second hand market, to buy anything like you described would be begging for trouble. I'd run rather than walk.
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If you *know* the car is good, and good value, then it's only £40 for an HPI check, so why not? HPI will insure you against the car having been written off, stolen, or having outstanding finance; I'm not sure what the position is with regard to mileage.
On the other hand, it does sound very dodgy, so unless you trust his warranty company and the insurance you get with HPI, I'd be very reluctant because any problems you get probably ain't gonna get sorted by him.
If there's no V5 forthcoming, don't go there though. It's possible that the guy is a bit disorganised or not used to be people being clued up, but I'd still be using even more caution than usual. If the car is anything less than very special, it's not worth your time and effort.
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