An Iterative method of individual nameplate detection using color images acquired from a high position is proposed for guidance of nighttime vehicles and other similar purposes. Segmentation is a very critical and difficult stage to accomplish in computer aided detection systems. Fundamentally the method contains iterative automatic thresholding and selecting the best threshold value which is applied to the original or enhanced dark night images. The main focus of the iteration based threshold to distinguish the image of the background and foreground. This method was tested on an actual outdoor vehicle images and results obtained from automatic thresholding of the experimental images are showing the validity of the method.