Bluetooth communication systems are constrained to use a low cost filtering technology, which requires designers to implement inexpensive noise reduction techniques. Improving Bluetooth sound and audio quality has been a topic of research over the years. Sound and audio quality in vehicles are areas that still require improvements in order to achieve better customer experience when using Bluetooth communication systems.This paper proposes a low cost, simple, and effective method to reduce noise in Bluetooth systems using Kalman Filtering. Our novel method is proposed to be used in vehicular Bluetooth applications. We have created a MATLAB/SIMULINK model to validate the proposed method. Results have demonstrated significant noise reduction and improvement to the processed speech signals.