We propose a new inter-vehicle communication and ranging method that uses Light Emitting Diode (LED) rear lights and an image sensor. Intensity modulating the rear lights makes it possible to use them not only as lighting equipment but also as data transmitters. The use of an image sensor yields a system that is stronger against background noise than is possible with a single photo diode. The proposed system can measure vehicular gap without the use of radar devices. One of the big advantages of the proposed system is its simple construction. Numerical analysis shows that a 640x480 image sensor makes it possible to communicate over 70 meter distances with a bit error rate (BER) of less than 10-6 in daytime, 1400 meters at night. The system can easily discriminate several vehicles at the same time from their transmitted ID. For distances of up to 60m, the error margin in measuring the vehicular gap is smaller than 2m.