The Government must crack down on untaxed foreign cars on British roads, the RAC has said.
Around 60,000 non-UK vehicles are registered with the Driver and Vehicle Licensing Agency (DVLA) annually but it is thought up to 15,000 are not.
This means around £3 million in vehicle excise duty (VED) is not being collected each year.
Under current regulations visiting non-UK cars must be registered with the DVLA once they have been here six months.
After paying an initial £55 registration fee they must ensure they have paid VED, obtain an MOT if the vehicle is over three years old and in some instances pay VAT.
But the RAC said:"Despite the fact the UK Border Force gathers details of every non-UK vehicle entering and leaving the country this information is not currently used by the DVLA for licensing purposes, which means the Government is missing out on valuable tax revenue.
"And, as the DVLA has no idea whether non-UK-registered vehicles have stayed in the country longer than six months, many over three years may well not have a valid MOT and therefore will be contravening insurance rules, thereby compromising the safety of all road users."
RAC head of external affairs Pete Williams said: "Given the prevalence of technology such as automatic number plate recognition, it is beyond belief that in the 21st century two important Government agencies - namely the UK Border Force and DVLA - are not already sharing information in a system that allows us to keep track of the comings and goings of non-UK vehicles."
A Department for Transport spokesman said: "We are aware of this issue and discussions are currently ongoing across government to identify ways of improving the flow of information between agencies in order to tackle this problem.
"We hope to announce firm plans shortly."