This letter analyzes the magnetic signatures of cars and investigates the use of anisotropic magnetoresistive sensors to estimate the relative position of a vehicle from its magnetic signature. Theoretical analysis and experimental measurements both show that vehicle magnetic field has a first order inverse relationship with distance at small distances. However, the parameters in the magnetic field-distance relationship vary significantly with the type and size of car. A sensor system consisting of 2 magnetoresistive sensors and an extended Kalman filter can adaptively estimate these parameters in real-time. Experimental results from tests with various vehicles show that the developed sensor system can reliably estimate vehicle distance from magnetic field measurements.