This paper discusses the development of a system model for the wireless steering wheel angle sensor and steering wheel system for the evaluation of the steer by wire system in a vehicle dynamic system. The steering wheel sensor is a wireless, contact-less sensor utilizing an optical medium for angle detection. The optical medium is operated based on a photodiode and photo-detector head. A reflecting disc or code-wheel, working similar to a compact disc, is used to reflect the light from the photodiode back to the photo-detector. The beam is reflected based on the content in the reflective disc to measure the relative angle through a micro-controller. The proposed wireless steering sensor and steer by wire system is modeled using the Matlab/Simulink and their performance is investigated to evaluate the steering response, vehicle dynamics, and steering feel of the system. Finally, the feasibility of the proposed system is discussed based on the developed model and simulation results.