There was a news story about 18 months ago of someone selling their motorcycle and the buyer takes it for a test ride. Unbeknown to the seller that person had no valid insurance and crashed the bike, seriously injuring two pedestrians.
Apparently because the rider had no insurance they were able to claim against the seller/owner's insurance which paid out. The seller/owner's insurance then proceeded to set about getting their money back through their policy holder, which resulted in him having to sell his house.
If this is the situation, how on earth can someone sell their bike privately? Even if the seller is holding full payment whilst the rider takes it for a test ride, the financial risk is huge.
You have to use your common sense in this situation.
If someone selling a bike is allowing test rides, then he should insist on seeing valid insurance of the potential buyer, including cover for riding other peoples’ bikes with their permission. Alternatively, the seller could speak to his own insurer to discuss incepting cover for allowing third parties to have test rides. If you have any doubts at all, don’t let the bike out of your sight. Even if a bike or car is left as a deposit, it might turn out to be stolen.
And without insurance in place for test rides you could struggle to make a claim on your own insurance if it turns out you handed the keys over willingly.