There are a bunch of different versions. My siblings and I usually do these:
-Look at the three (or however many, depending on the state) letters. Try to either come up with a word that contains all three (sometimes it’s impossible, in which case you go on to the next one) or you make up a sentence that makes a reasonable amount of sense using the letters as an acronym. For example, PHG1234 could be Play Hazardous Golf. And that’s one of the more sensical (if that’s a word) ones.
-Keep a log of how many different states you find. Don’t tell anyone what you find and write down the state and where you find it (to protect against cheating, though we do have an honor system). By the end of the trip, whoever has the largest variety of states wins.
Definitely not bad games, but when you’re in the car for five hours it can get a bit stale.