The increase in the population of cities and the number of vehicles leads to increase in congestion on roads and accidents. The lack of quick medical service on road accidents is the major cause of death. In such situation, an automatic accident detection can help to save the loss of life. Due to increase in number of cars there is also an increase in number of accidents on the roads. In this paper, we have designed a proto type for automatic accident detection and Avoidance system using IOT and Vehicle Area Network. The system is able to avoid accident using distance measuring sensors and also detect accidents if they occur using sensors. In case of an accident the location is sent to the hospitals and the nearby vehicle using VANET. The Avoidance sensor will first try to avoid the accident by slowing down the vehicle whenever a nearby obstacle is detected, every if after that an accident is occurred the shock sensors will detect it. The Vehicle will be connected to each other through a server and will communicate with each other, after an accident the hospitals present in that particular Area and the cars present in that area will be informed with the location acquired from GPS. There will also be an alcohol sensor that will detect if the driver has consumed alcohol and lock the car if detected.