Accurate lane recognition for moving vehicles is important for lane keeping and lane changing assistance systems. Additionally, this information could be leveraged by Intelligent Transportation Systems to suggest lane changes for improved traffic load balancing across lanes. This paper presents a position estimation algorithm for moving vehicles based on RFID (Radio Frequency Identification) active sensors placed on roadsides and lane boundaries, and multiple on-car RFID receiver antennas. To improve localization accuracy, the algorithm proposes two novel ideas: (1) compute pair-wise position estimates using the RSSI (Received Signal Strength Indication) of all pairs of signals received from RFIDs, and (2) compute the final position as a weighted average of these pair-wise estimates using a dynamic weighting function that assigns higher weights to positions estimated based on closer RFIDs. The results from our field experiments indicate that the proposed method achieves 0.7-meter localization accuracy when RFIDs are placed at 0.5-meter intervals and a vehicle has 8 antennas. This accuracy allows a moving vehicle to recognize which lane it is in. The localization accuracy of the proposed method was found to be mostly stable for any type of road shape and any number of lanes. A further 14% accuracy improvement is achieved when RFIDs are placed at 0.25-meter intervals and the RFIDs located farther than 30-meter are excluded from computation.