Documents

There are several documents you need to know about relating to your car and driving. They all have a specific role, and there are some connections between them.

Driving Licence

You MUST have a driving licence to legally operate a motor vehicle on public roads and places in the U.K. and the type of licence you hold will determine what types of vehicle you may use. As a learner driver your licence entitles you to drive a motor-car, under suitable supervision. It may also give you provisional entitlement for other classes of vehicle such as motorcycles.
This is all your licence does. You do not need it to buy, tax or insure a car.

Vehicle Registration Document

This is often refered to as the "log book". It is the document that comes with the vehicle and details all the vehicle's "personal details", such as make, model, registration number and colour. It also specifies the name and address of the vehicle's "keeper" or owner. When a vehicle is bought or sold, the old and new keepers must fill in their respective parts of the registration document and forward these to DVLA at Swansea. If a vehicle has been bought un-taxed, the registration document will be needed to tax the vehicle.

Insurance

To operate a motor vehicle on public roads and in public places, it MUST be insured. The legal minimum cover needed is known as "Third Party", which indemnifies you against claims made against you by another person. This is the cheapest type of insurance, because it does not cover you or your car in any way.
Third party, fire and theft insurance will reimburse you in the event of a total loss of your vehicle by fire, or if it stolen and not recovered, but you will only get the Book Value of your car (the price a car trader would pay you if they bought the car for resale), not the price you paid for the car.
Fully Comprehensive insurance is the most expensive type of insurance, and this level of cover will ensure that your car is repaired in the event of a crash or other accidental damage, or the car will be replaced or the value of the car paid to you (depending on the age of the car and the details of your policy) in the event of total loss. Many Fully Comprehensive policies also have useful "extras" such as a courtesy car if yours is in for repair, or free windscreen replacement. These do vary a lot, and the cheapest may not be the best, so read the "small print" and shop around!
When you insure a car you will be given a policy document which details the type and level of cover, and a "certificate of Insurance" which is the document you may need to produce to prove the car is insured, say when taxing the car.

MOT

Once a car reaches three years old, it must have an annual check of roadworthyness, commonly known as the MOT. This check must be carried out by an approved garage, and is a legal requirement.
The MOT covers a wide range of elements of the car, such as brakes, lights, seatbelts and body structure, but does not include checks on the condition of the engine and transmission amongst other things. All it does is confirm that on the day of the test, the specified items were within acceptable limits. A new MOT is NOT a guarantee that the car is in good condition, although when buying a second hand car a new MOT is very worthwhile. When taxing a car over three years old you will need to produce a current MOT.

Vehicle Excise Duty

Otherwise known as Road Tax, this is the disc that must be displayed in the bottom left corner of the windscreen. It is a charge levied by the government which entitles you to keep and use a car on public roads. VED can be bought for 6 months or 1 year, but note that 2x6months will be more expensive than 1 year. If you are storing a car off road and not using it, you do not have to pay VED, but each year you must complete a SORN (statutory off road notification) declaration.