A cooperative state estimation framework for automated vehicle applications is presented and demonstrated via simulations, the estimation framework is used to estimate the state of a lead and following vehicle simultaneously. Recent developments in the field of cooperative driving require novel techniques to ensure accurate and stable vehicle following behavior. Control schemes for the cooperative control of longitudinal and lateral vehicle dynamics generally require vehicle state information about the lead vehicle, which in some cases cannot be accurately measured. Including vehicle-to-vehicle communication in the state estimation process can provide the required input signals for the practical implementation of cooperative control schemes. This study is focused on demonstrating the benefits of using vehicle-to-vehicle communication in the state estimation of a lead and following vehicle via simulations. The state estimator, which uses a cascaded Kalman filtering process, takes the operating frequencies of different sensors into account in the estimation process. Simulation results of three different driving scenarios demonstrate the benefits of using vehicle-to-vehicle communication as well as the attenuation of measurement noise. Furthermore, in contrast to relying on low frequency measurement data for the input signals of cooperative control schemes, the state estimator provides a state estimate at every sample.