The paper presents a new method for electronic toll collection system and to match car number plate detection system. The electronic toll collection system (ETS) has been fabricated based on microcontroller. Here a system is developed to collect tolls according to the weight of the vehicle. The car number plate detection method utilizes template matching technique to approximate the location of car number plate. Then, using this output from the template matching method, color information is used to eliminate the unwanted color areas from the approximate number plate region without affecting the correct color regions. Hence, the number plate region can be determined more accurately. This work can easily be done by image processing system using MATLAB. The method has low complexity and reduced the processing time magnificently. This automated system also shows a better performance in highway traffic management. This paper shows the gateway to fabricate a highly automated toll-plaza.