Recent advances in wireless communication technologies and auto-mobile industry have triggered a significant research interest in the field of VANETs over the past few years. VANET consists of vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communications supported by wireless access technologies such as IEEE 802.11p. This innovation in wireless communication has been envisaged to improve road safety and motor traffic efficiency in near future through the development of Intelligent Transport Systems (ITS). Hence, government, auto-mobile industries and academia are heavily partnering through several ongoing research projects to establish standards for VANETs. The typical set of VANET application areas, such as vehicle collision warning and traffic information dissemination have made VANET an interested field of wireless communication. This paper provides an overview on current research state, challenges, potentials of VANETs as well the way forward to achieving the long awaited ITS.