No nothing!
I suggest you call your insurance company tomorrow and explain the situation. There may be an additional premium to pay as you're not the registered keeper, but I would expect them to agree to a grace period whilst you get it sorted.
I'd be tempted to go to the dealer and ask to speak to their MD/Head of Business/whatever they call them to ask what they're going to do to sort it out. Don't bother with the sales people as they don't care.
Don't accept all this stuff about the previous owner. Give them a deadline to fix it or buy the car back from you. They won't, of course, but you have to make a bit of a fuss or they'll never deal with it.
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