The French coach was interviewed by police at the scene of the incident before being allowed to continue his journey to his home in South Liverpool after travelling from the club's Melwood Trainimg ground.
Neither driver was hurt in the incident, though the Ford Ka's bumper was almost torn off and suffered severe damage to both the wheel arch and body work.
Houllier's vehicle received only monor damage, and the Reds boss even took time to sign autographs as onlookers congregated to catch a glimpse of the 56-year-old.
"He looked quite calm after the initial shock of the accident, and even signed a couple of autographs before he spoke to the police," revealed an onlooker.
"The traffic really slowed down as everybody stared at Houlier while he was standing waiting for the emergency services."