The primary objective of this work is to design a parking guidance system to reliably detect entering/exiting vehicles to a parking garage in a cost-efficient manner. Existing solutions (inductive loops, RFID based systems, and video image processors) at shopping malls, universities, airports etc., are expensive due to high installation and maintenance costs. There is a need for a parking guidance system that is reliable, accurate, and cost-effective. The proposed parking guidance system is designed to optimize the use of parking spaces and to reduce wait times. Based on a literature review we identify that the ultrasonic sensor is suitable to detect an entering/exiting vehicle. Initial experiments were performed to test the sensor using an Arduino based embedded system. Detection logic was then developed to identify a car after analyzing the initial test results. This logic was extended to trigger a camera to take an image of the vehicle for validation purposes. This system consists of Arduino, ultrasonic sensor, and a temperature sensor. It was installed and tested in Richard Beard Garage at the University of South Florida for five days. The test results of each trial are provided and average error for all the trials is calculated. The error cases occur due to golf carts, straddling cars on both entry/exit lanes, and people walking under the sensor. The average error of the system is 5.36% over five days (120 hrs). The estimated cost for one detector per lane is approximately $30.