Meeting casualty-reduction targets by 2020 will help save 2,500 lives and cut costs by more than £4 billion, according to a report by a road-safety charity.
The report - Deaths and Injuries on Britain's Roads - from the Institute of Advanced Motorists (IAM) found that each fatal accident cost the UK economy £1.79 million in lost output, health care, pain and suffering in 2009.
Road collisions also lead to higher car insurance premiums.
Findings revealed that last year the UK topped the world road safety league table of safest roads, up from its sixth place in 2007 and fourth spot in 2008.
According to the report, in the EU, the UK has half the road death rates of Austria, Belgium, Portugal and Luxembourg.
Neil Greig, policy and research director, IAM, said: "These staggering figures prove conclusively that investing in saving lives on the roads saves the country money, so funding being taken away from this area is a false economy."
Mr Greig added: "Meeting our casualty reduction targets has meant that deaths on Britain's roads have halved over the past 20 years with 31,000 deaths avoided and savings to the economy of around £50 billion.
"The IAM calculates that achieving similar targets for road deaths by 2020 would save society 2,500 lives and the economy over £4 billion."
He said it was important for public bodies to compensate for any cutbacks in funding for road safety.
© Press Association 2010