Police and cities might not like it (I'll get back to that in a second) but I think car tracking should be mandatory for everyone. Cars should track their position and speed and report to local antennas located along the road and at intersections where there are signals and infrastructure in place. This achieves a few things...
Traffic tickets are automated. And not just speeding tickets. So everyone will become better drivers since it's no longer a game of catching someone doing something stupid and giving them a big ticket. People WILL change their driving habits. Furthermore since you have half the equipment in your car anyway; electronics systems/software can be installed that will warn/prevent you from doing things that will give you a ticket.
Traffic cops will no longer be necessary. So less police will need to be employed. And since cities save on salaries they can afford to shift some of those people to real crime and violence. Cities will miss out on ticket revenue and will have to make up for it some other way but they will save with fewer police.
Every car is tracked. It will become 100 fold harder to commit a crime. You can't rob a bank, the police will know the location of the getaway car and any cars one could switch to. You can't steal a car. You can't turn off your transmitter or impersonate another car since traffic systems will notice you. You can't get away from the scene of a crime except on foot. They have cameras on buses already. Security cameras on the street are common enough. The more likely are you to being caught the less likely you will commit an offense or in cases of violent passion to flee.
For those of you fearing a tracking state there is just no way to avoid it. Cameras will be installed on traffic lights anyways and with computer software will be able to read every license plate as it goes by. You are and will be tracked according to your car. What I suggest actually gives more benefits to society since they are tracked anyway.
There still can be legislative and judicial rules on using stored tracking data. First rule is every query of the data is tracked and must be reviewed during or after the fact. Further there should be hard penalties for abusing the system. Specifically fines and jail time for cops or exposing them to a personal civil suit. Second there should be security audits by civil panels. In case of ANY critical security flaw the system will be taken offline until fixed.