Millimeter-wave (MMW) radar is essential in roadside traffic perception scenarios and traffic safety control. For traffic risk assessment and early warning systems, MMW radar provides real-time position and velocity measurements as a crucial source of dynamic risk information. However, due to MMW radar’s measuring principle and hardware limitations, vehicle positioning errors are unavoidable, potentially causing misperception of the vehicle motion and interaction behavior. This paper analyzes the factors influencing the MMW radar positioning accuracy that are of major concern in the application of transportation systems. An analysis of the radar measuring principle and the distributions of the radar point cloud on the vehicle body under different scenarios are provided to determine the causes of the positioning error. Qualitative analyses of the radar positioning accuracy regarding radar installation height, radar sampling frequency, vehicle location, posture, and size are performed. The analyses are verified through simulated experiments. Based on the results, a general guideline for radar data processing in traffic risk assessment and early warning systems is proposed.