Dogs that lunge at people and cars are a danger to themselves and others. Getting your dog out and about from a young age is a good way to prevent this habit from developing. For dogs that already lunge, training is the best way to teach him how to behave.
Teach your dog to pay attention to you. He needs to learn that no matter what else is going on, he needs to keep his eye on you. Do this by working with him in the house, where there are few distractions. Say his name and toss him a treat as soon as he looks at you. Repeat the process until you are confident he knows what you want.
Take him outside and repeat the process. Start in an area where it will be easy for him to behave; for example, if he lunges at cars, start working with him on a relatively quiet road. Say his name and give him a treat. You can walk around some so he doesn't get bored, but when you see a car coming, say his name and treat him again. He will probably focus on you, ignoring the car. If he does try to lunge, do not give him the treat -- instead, circle away from the road and walk away. Say his name and, assuming he focuses, give him a treat.
If he lunges at people, use the same process. Select an area where there are people, but it is not crowded. You may want to choose a spot where there are few small children hanging around, as they often incite bad behavior, with their noisy play and erratic motion.
Challenge him. Once he realizes that he is supposed to pay attention to you, and he doesn't have to lunge at vehicles or people to protect himself or you, start visiting more crowded areas. Take it slow, you don't want to overwhelm him.
Socialize him. Once he gets over the urge to bark and lunge, it can be tempting to stay home and take it easy. It is important to regularly get him out for walks in public or he may regress. You've put in the time to retrain him from this unpleasant habit, now enjoy your progress.
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