A bench headed by Justice G S Singhvi also said it would examine whether closure of roads for facilitating movement of VIPs is lawful and constitutional.
It also said beacons and sirens be used only on ambulance, fire services vehicle, police and army vehicle.
"We think you can remove the red lights from all other vehicles straight away. One thing is there in the mind of people that they dislike the red light. Why not reconsider removing it? That will be a great signal for bringing everybody at par," the bench told the Centre.
The bench was hearing a petition filed by an Uttar Pradesh resident on misuse of beacon in the state.
In earlier proceedings on January 17, the bench had strongly disapproved of police protection given to "all and sundry," including MPs and MLAs facing no security threat and directed the Centre and all states to furnish names of the people given the security and the expenditure borne by states on it.
"Security can be given to the head of state, the Prime Minister, Vice President, Speaker, Chief Justice of India, the heads of constitutional authority and similar counterparts in the states. But why all and sundry is given red beacon and security? Even mukhia, sarpanch move with red beacon," the bench had said.