This paper proposes and validates a modified cellular automata model for determining interaction rate (i.e. number of car-following/overtaking instances) using traffic flow data measured in the field. The proposed model considers lateral position preference by each vehicle type and introduces a position preference parameter β in the model which facilitates gradual drifting towards preferred position on road, even if the gap in front is sufficient. Additionally, the model also improves upon the conventional model by calculating safe front and back gap dynamically based on speed and deceleration properties of leader and follower vehicles. Sensitivity analysis was carried out to determine the effect of β on vehicular interactions and the model was calibrated and validated using interaction rates observed in the field. Paired tests were conducted to determine the validity of the model in determining interaction rates. Results of the simulations show that there is a parabolic relationship between area occupancy and interaction rate of different vehicle types. The model performed satisfactorily as the simulated interaction rate between different vehicle types were found to be statistically similar to those observed in field. Also, as expected, the interaction rate between light motor vehicles (LMVs) and heavy motor vehicles (HMVs) were found to be higher than that between LMVs and three wheelers because LMVs and HMVs share the same lane. This could not be done using conventional CA models as lateral movement rules were dictated by only speeds and gaps. So, in conventional models, the vehicles would end up in positions which are not realistic. The position preference parameter introduced in this model motivates vehicles to stay in their preferred positions. This study demonstrates the use of interaction rate as a measure to validate microscopic traffic flow models. © 2017, The Author(s).