Ijaz Ahmed said:

"If I had to do this job, i would have fixed a permananet magnet on a pully(main or generator), and place a hall effect sensor/coil near it. This way, one can get RPM of the pully, giving you engine RPM.
"

You don't have to do that! it is already done! The thing is, that Hall sensor, and in older ones inductive sensore is used! The ignitation system must triger High voltage coil. And this must be synchronized with RPM! You have to find it in your car. Usaly it is near high voltage distributor on the rotating shaft of the motor.

so, you can use it, and all motor testers are using it.