Intelligent Transportation Systems (ITS) require Vehicular Ad-hoc Network (VANET) as it provides communication between Vehicle to Infrastructure (V2I), Infrastructure to Infrastructure (I2I), and Vehicle to Vehicle (V2V). It is a game-changing system that enhances traffic efficiency, passenger comfort, and road safety through better coordination. Despite the development of VANET technology, there are still some obstacles, such as network architecture restrictions, security threats, privacy issues, and scalability challenges that must be resolved to get the best results. Researchers are investigating new methodologies, tools, and applications to tackle these problems. VANET’s potential is demonstrated by applications like smart parking, traffic management, and accident prevention. The integration of 5G, edge computing, and artificial intelligence are future paths that will lead to a transportation system that is safer and more effective. This comprehensive analysis identifies trends, challenges, gaps, and future research paths of VANET technology. It also delves into its prospects like integrating with upcoming technologies like 5th and 6th generation cellular networks as well as artificial intelligence. Our review takes a methodical approach, collecting information from academic publications and articles published between 2014 and 2024. The purpose of this review article is to provide researchers, practitioners, and policy makers with useful information about the present and potential applications of VANET technology.