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In the scope of VANETs, nature of exchanged safety/warning messages renders itself highly location dependent as it is usually for incident reporting. Thus, vehicles are required to periodically exchange beacon messages that include speed, time and GPS location information. In this paper paper, we present a physical layer assisted message authentication scheme that uses Angle of Arrival (AoA) estimation to verify the message originator location based on the claimed location information.Within the considered vehicular communication settings, fundamental limits of AoA estimation are developed in terms of its Cramer Rao Bound (CRB) and existence of efficient estimator. The problem of deciding whether the received signal is originated from the claimed GPS location is formulated as a two sided hypotheses testing problem whose solution is given by Wald test statics. Moreover, we use correct decision, PD, and false alarm, PF , probabilities as a quantitative performance measure. The observation posterior likelihood function is shown to satisfy regularity conditions necessary for asymptotic normality of the ML-AoA estimator. Thus, we give PD and PF in a closed form.We extend the potential of physical layer contribution in security to provide physical layer assisted secret key agreement (SKA) protocol. A public key (PK) based SKA in which communicating vehicles are required to validate their respective physical location. We show that the risk of the Man in the Middle attack, which is common in PK-SKA protocols without a trusted third party, is waived up to the literal meaning of the word "middle".