An intelligent location-aware data aggregation mechanism for real-time observation, estimation, and efficient dissemination of any kind of traffic information in vehicular ad hoc networks (VANETs) is presented in this paper. The mechanism introduces a location awareness algorithm, enabling spatiotemporal database indexing and providing the location context of the messages without the use of advanced positioning systems such as satellite navigation and digital maps. Intelligent passive clustering and adaptive broadcasting are used to minimize the number of messages exchanged, packet collisions, and network load. The incoming messages are fused by a Kalman filter, allowing the description of the traffic-related information as a system characterized by as many variables as needed, depending on the application design. The scheme allows the comparison of aggregates and single observations, which enables their merging and better overall accuracy. Old information in aggregates is removed by real-time database refreshing, thus leaving only newer relevant information for the driver to make real-time decisions in traffic. The mechanism is generic and can be used for any kind of VANET information. It is evaluated by extensive simulations to show the efficiency and accuracy.