VANETs have emerged as an exciting research and application area. Increasingly vehicles are being equipped with embedded sensors, processing and wireless communication capabilities. This has opened a myriad of possibilities for powerful and potential life-changing applications on safety, efficiency, comfort, public collaboration and participation, while they are on the road. Although, considered as a special case of a Mobile Ad Hoc Network, the high but constrained mobility of vehicles bring new challenges to data communication and application design in VANETs. This is due to their highly dynamic and intermittent connected topology and different application's QoS requirements. In this work, we survey VANETs focusing on their communication and application challenges. In particular, we discuss the protocol stack of this type of network, and provide a qualitative comparison between most common protocols in the literature. We then present a detailed discussion of dfferent categories of VANET applications. Finally, we discuss open research problems to encourage the design of new VANET solutions.