Road accidents and traffic jams are common problems and being the target of a lot of research work. Vehicular Ad hoc Network (VANET) is a common part of Intelligent Transport System (ITS) which is directly involved in handling these problems and aims to make journey on road comfortable. The urban traffic flow depends on the driver behavior, and also, it is influenced by traffic control and environmental factor , as the number of vehicles in urban area is increases, the traditional traffic system faces so many problems. This paper represents a review on various traffic system & working of vehicular adhoc network. After the review of traffic system and VANET it gives a survey on various techniques used in traffic system. This paper also proposes a solution to resolve such traffic system problems.