Purchasing a vehicle - non-US resident

[The Taco Monster]

Peru to Seattle, ..to Vancouver ...from BC along the West Coast to Los Angeles.
We would like to purchase a car in Seattle, drive it to and around Canada and then use it for the roadtrip.
We are both South African citizens living in London, but I will probably be travelling on a British passport ....have a UK driving licence... ...and what documentation

Contacting Washington State was a very good start. Suggest you let your plans be known to Canadian and U.S. Customs, to know how to document your intent to return the car to the U.S. Part of this is the 9/11 antiterrorist screening, part of this is intercepting cars headed into Canada for a quick sale. As long as they are sure of your intent, there should be no problem. But I say this because ...

(A) When the car is first purchased you might get a temporary paper license. Washington or some forum member can clear this up. If it's a brand new car I'd expect you'll get a paper license plate good for up to whatevert max the State of Washington has set. You'll just stand out more with it. (When asking about this facet, also ask about the best way of getting the permenant plate into your hands before you sell the car.)

(B) Then you'll be driving across the border as a non-US citizen.

(C) With <what> assurances they'll see you again?

1) In summary, if you don't fit what they are expecting, you'll want the right documentation if you're scrutinized.

2) Another reason for bringing solid evidence of your intent to return the car to the U.S., is Canada will otherwise want to collect taxes and levies that'd apply if the car were to stay there.

...insurance, tax I'll need?

Each state, and Canada have their own minimum coverage amounts. Consider higher amounts if you are not comfortable with with coverage for the worst case. Also ask a Washington State insurance agent about a proof of insurance card for Canada -- It is a Canadian form, filled out by an insurance company in the U.S. as to the amounts they will cover, asserting they have acceptable representatives in Canada. I last drove in Canada in the early '90s -- possibly the card's not needed now, but I'd ask.

You might consider an "umbrella" insurance policy before leaving home. i.e., one that covers limits higher than standard policies you already have with the same company.

The insurance policies in the U.S. categorize coverages differently than in GB ... Bare Bones policies are expressed in three figures, such as 50/100/25. The first number states up to $50,000 will be paid for medical coverage per person, the second up to twice that amount of medical coverage for all persons for the same accident. The last figure indicates the max amount of "property damage" (i.e., the car(s)) for any one accident.

This five year old web-page says the Canadian miniumum is $200,000 (CAD).

Additional insurances options: car rental coverage in case of accident, towing for the same reason, "Comprehensive" -- things not covered by vehicle accidents -- eg - a rock strikes your windshield/windscreen and cracks it. Some states offer or require a "no-fault" coverage -- a modest amount that is paid before fault is determined, - ask about what it would cover - depends upon the state of issue.

...In the other thread you spoke about tighter emission controls in CA

Upon initial registration, nonresident and specially constructed vehicles 1976 and newer require smog certification.

Italics mine.