The use of the automobiles increased tremendously in the last two decades, hence the vehicle collision and its impact emerged as the major problem, as safety of human’s life is concerned. In this paper, anti-collision system is proposed in order to avoid vehicular head to back collision which are running under heavy traffic conditions. The developed system works in two stages: In the first stage work has been done on Damage Avoidance System (DAS) which continuously measures the distance between two vehicles using ultrasonic sensor i.e. the range finder, which is fed as an input to Atmega16 microcontroller, and these distance values are displayed in the LCD panel. If any vehicle comes within the unacceptable limit specified, it will glow the LED lamp and put the sound buzzer on, which acts as a indication for danger. In the second stage, work has been done on implementation of Damage Repair Services (DRS) for vehicles when accident takes place. Additionally implementation of Web Service Negotiation take place, which negotiates between insurance companies and repair companies using Damage Secure Service Software (DSSS). These characteristics enable the vehicle anti-collision system to avoid accidents, and can be effectively used in local traffic conditions. This system is reliable, cost-efficient and fault tolerable.