For a better compatibility, proxy mobile IPv6 (PMIPv6) has been proposed as a network-based mobility management protocol without the requirement of the participation of mobile terminals. With the feature of localized mobility, PMIPv6 is often used in vehicular ad hoc networks (VANETs) to suit for the high mobility property in vehicles. However, the design of PMIPv6 does not consider security issues thoroughly. The identity authentication of a mobile terminal is suggested by an authentication/authorization/accounting (AAA) server architecture in PMIPv6 standard, which damages the localized advantage because of the long transmission distance between mobile access gateways (MAGs) and the AAA server. In this paper, we propose a localized authentication and billing scheme to reduce the communications between MAGs and the AAA server. Moreover, our billing function enables an Internet Service Providers (ISP) to easily charge mobile terminals (MTs) even if these MTs are roaming within other ISPs' networks. The techniques of the signcryption, hash chain and batch verification are adopted to achieve multiple advantages including (1) mutual authentication and session key agreement, (2) privacy preserving, (3) confidentiality, integrity, and non-repudiation properties, (4) efficient billing and payment clearance.