The Department for Transport is to update its 40-year-old rules covering release of data from the Driver and Vehicle Licensing Agency register.
The rules protecting the register of 35 million vehicles and their owners were originally drawn up before the introduction of electronic databases, the DfT admitted.
It has launched a public consultation seeking views on which organisations should have access to the data and why, how access should be managed and audit measures.
The current regulations give the police, local authorities and customs and excise access to the register. Access must also be given to “any person who can show to the satisfaction of the Secretary of State that he has reasonable cause for wanting the particulars”.
In recent years, information from the register has been released to insurance firms, clamping companies, housing associations, banks, private investigators and private individuals.
Last year, the National Audit Office found that nearly a third of the DVLA's records contained an inaccuracy.
Roads minister Stephen Ladyman said, “We think it's very important to protect privacy and confidentiality, and I understand why many people have serious concerns about the kinds of organisations that receive information from the vehicle register.
“We want a system that protects people from misuse of their personal details, but that enables organisations and individuals with a good reason to identify the keeper of a vehicle to do so.”