The European Parliament has voted for an EU-wide emergency alert system called eCall to help ambulance crews get to road accidents faster.
As standard, from 31st March 2018 new cars and light vans will have the system installed.
The eCall device is said to alert rescue services automatically using the 112 number.
This new technology was first proposed in 2012 but legislation was delayed amid privacy concerns.
After meetings between MEPs and EU governments it was agreed that eCall would provide only basic data such as the type of vehicle, fuel used, time of incident and location.
The parliament's lead negotiator on the issue, Czech Social Democrat MEP Olga Sehnalova said a standard accident alert system is needed in Europe because "when you cross a border you have a language problem and often do not even really know where you are".
Those in favour of the plans say rescue services will be able to reach crash scenes faster, saving lives and reducing the severity of injuries.
Mrs Sehnalova said privacy would be protected.
She added: "The information is transferred only at the moment a serious accident occurs and airbag are sensors set off. Then a standard set of information is sent to the rescue services."
Jan Philipp Albrecht from the Green party said the technology should not be mandatory however.
He explained: "The consequence of being connected all the time means that we are also subject to more possibilities to track us.
"We reduced the data being processed to a very minimum, but nonetheless it is technically possible for companies, or for an authority, to track your position and to even surveil you. So I don't think this should be obliged to everybody. Everybody should have the chance to opt out."
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