Millions of pounds worth of unpaid parking fines have to be written off each year by councils unable to trace drivers of foreign vehicles, according to the Local Government Association (LGA).
Some councils have had to rip up thousands of parking tickets with one local authority - Brighton & Hove Council - being owed more than £750,000.
EU laws allows European vehicles to drive on UK roads for six months before having to register with the Driver and Vehicle Licensing Agency (DVLA) but the Government does not keep a record of the estimated three million entering the UK each year.
Currently the DVLA only records information about non-UK-registered vehicles when they are notified through offence reports provided by the police or from tip-offs from the public.
This means foreign vehicles are able to disappear within the system by going unregistered.
The LGA said this left town hall parking bosses facing an impossible task to chase down drivers for payments while laws in other countries mean British drivers parking illegally abroad can be tracked and chased.
Councils charging fees for parking solely to make a profit "is a misconception" as any money generated has to go back into the community, a Local Government Association spokesman told Good Morning Britain.
Any parking charges handed out on the street had to be spent on road and pavement upkeep and money collected in car parks "is used on essential services".
High parking charges and "unfair" fines drive away motorists and "undermine local high streets", a government minister has said.
Communities minister Penny Mordaunt criticised local councils for raising parking prices and urged councils to do more to support their high streets:
Excessive parking charges and unfair parking fines push up the cost of living and undermine local high streets and shopping parades.
That's why we're stopping the industrial issuing of fines by parking spy cars, introducing 10-minute grace periods at the end of on-street paid for and free parking, and why we've scrapped the last administration's rules which told councils to hike up parking charges and adopt aggressive parking enforcement.
But we want councils to do more and rein over-zealous parking enforcement, so it focuses on supporting high streets and motorists, not raising money.
Some 22% of drivers have had to start paying for a parking spot that was once free, a survey from a national car insurer has found.
According to the RAC:
Some 24% said traffic wardens were now more active in their area.
In addition, 41% of motorists believed that the local authority where they lived used the revenue from parking charges to subsidise other areas of non-motoring expenditure.
A total 65% of motorists reported even when they finally find a space to park, it was too small for today's breed of cars, many of which are wider than previous generations of vehicle because of the addition of side-impact protection features.
The car insurer said 67% of the 1,526 drivers it spoke to believed parking was more sparse in their home town or city centre and restrictions had tightened.
Drivers pointed to parking charges pushing up the cost of a trip to town.
The RAC added London motorists, in particular, had "felt the pain" of increased parking costs, with 59% finding high street parking was hitting their pocket more.
RAC technical director David Bizley said: "Councils should be compelled to report where the money raised from parking goes - giving drivers assurance that it is being ploughed back into road and transport improvements, rather than just plugging budget holes elsewhere."
Banning CCTV cameras on cars will stop "greedy" councils using the method as a "cash cow", Communities Secretary Eric Pickles has said.
Nine million parking fines are estimated to be handed out by local councils in England every year, generating £1.3 billion in revenue in 2010, and Mr Pickles believes too many parking tickets were being issued for the "wrong reasons".
"CCTV spy cars can be seen lurking on every street raking in cash for greedy councils and breaking the rules that clearly state that fines should not be used to generate profit for town halls," the MP said.
"Over-zealous parking enforcement and unreasonable stealth fines by post undermine the high street, push up the cost of living and cost local authorities more in the long term.
"Today the Government is taking urgently needed action to ban this clear abuse of CCTV, which should be used to catch criminals, and not as a cash cow."
The idea local councils deliberately set out to trap drivers who break parking laws as a means of raising funds is "a myth", according to a campaign group for local authorities.
Councillor Peter Box, chair of the Local Government Association's Economy and Transport Board, said:
It is frustratingly familiar to hear Big Brother Watch again peddling the myth that councils are enforcing parking regulations just to raise money.
However, it is wholly inaccurate and misleading for them to claim councils are alone in warning about the dangers of banning the use of CCTV for parking enforcement.
Road safety campaigners, schools, disability and pedestrian charities and councils have all come together to warn the Government that banning CCTV parking enforcement will put school children and disabled pedestrians at risk and worsen road safety.