Fed up residents claim their street is starting to resemble a used car lot.
People living in Woodgreen Avenue say there can be up to 12 cars for sale at any one time and the road has become an eyesore.
Householders claim a school bus is now forced to drop pupils on the opposite side of the road, and they are also concerned about access for emergency vehicles.
Residents say the problem has been around for years, but has been steadily growing.
Other areas across the town affected include Bloxham Road, Kingsway, Ruscote, Oxford Road and Queensway.
Local councillors believe the problem stems from traders who don’t want to pay for a forecourt rather than individuals selling their old car.
Maureen Wickham, 64, of Woodgreen Avenue, said when her son dropped her off he could not get near her house for parked cars.
She said: “They park no end of cars here. At the moment there are five, but there have been 12 on the road.
“If an ambulance or fire engine had to get there they have got no chance.
“The school bus has got to park on the opposite side.
“It’s terrible. It’s about time something was done.”
Walter Houghton, 73, of Lincoln Close, added: “It’s an eyesore along here, I would like to see them shifted.”
County councillor Surinder Dhesi has handed in a petition to Cherwell District Council and called for fines of up to £100 a car to be introduced.
“It’s not the credit crunch causing this – it’s easy money, cash in hand no questions asked.
“It’s not fair, residents are being prevented from parking at their homes.
“Banbury is becoming a public car lot and they are spoiling our beautiful town.”
Town and district councillor Aylas Ahmed said he had already initiated a report which was due to go before Cherwell’s executive next week over the issue.
“All the matters raised have already been raised by myself and councillor Kieron Mallon at district, county and police level.
“These agencies are now working together to solve these problems and there is a report going to the district council’s executive with various options working with the other agencies to alleviate these problems.”
Ian Davies, Cherwell’s strategic director for environment and community, said trading standards was responsible for cars traded on the road side.
He said: “Current legislation restricts Cherwell in the steps it is able to take but we are always looking for new routes to pursue, some of which we are now exploring.”
In April, Andreas Hambis, 43, of Rye Close, Banbury, pleaded guilty to six offences for selling cars at the roadside in Banbury without making it clear he was operating in the course of a business.
He was fined £1,200 by magistrates.
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