Questions are being raised about the benefits of the car registration system.

About 235,000 fines are handed out to motorists each year for not having an up-to-date registration on the windscreen.

At $200 a pop it's being called a government cash-grab.

But Motor Industry Association CEO David Crawford says registrations hold key information the industry needs access to that couldn't easily put anywhere else.

"From an industry perspective, when we do safety vehicle recalls we need to be able to accurately access name and address data to be able to identify those vehicles at risk of failure."

However, Crawford concedes there could be issues with the current system.

"If there is low compliance levels, that would be a signal that something is not quite right with the system as it is currently designed."

LISTEN ABOVE AS DAVID CRAWFORD SPEAKS WITH MIKE HOSKING