Question Author
tonyav - No the car wasn't insure by us, my brother was insured on it fully comprehensive and I confirmed this by checking his covernote. His insurance later went on to be cancelled because he didn't provide proof of no claims which is why it was seized.
factor30 - My brother had insurance at the time we gave him the car, we checked his covernote. It was cancelled by his insurance company at a later date.
Baldric- Police won't tell us which auction so we can't buy back.
Bednobs - yes i posted in another section and it was suggested I post here for more advice.
An update on the situation is that the car has now been sold as we have had a letter from the DVLA. When we've contacted the police about this, they said we can have any proceeds from the sale minus the storage and recovery charges however they want proof of ownership for the car. A logbook won't do, it has to be the original receipt from when we purchased the car in 2008. Which I don't have!