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Telematics is the monitoring and reporting of vehicle and asset data that is gathered through GPS and diagnostics technology. It’s an important part of fleet management – the coordination of all vehicles within a fleet.
A combination of ‘telecommunications’ and ‘informatics,’ telematics collects data that can include location, speed, fuel consumption, and more. It’s a great tool for improving efficiency and cutting spend, with use cases across navigation, insurance risk assessment, and route planning.
In this article, we’ll unpack everything you need to know about telematics, how it differs from GPS, and what it can do for your business.
What Is Telematics?
Telematics refers to vehicle and asset data that is monitored and collected as a part of fleet management. It’s made possible through GPS tracking and a network of tools such as receivers, call networks, cloud, and on-board monitors.
This ‘telemetry’ data is collated by a ‘black box’ device and sent to a centralized, usually cloud-based server, before it’s sent to the end user. With this information at their fingertips, fleet managers can ‘uncover hidden costs while revealing potential for greater productivity and efficiency,’ according to Verizon.
To build a more complete picture of your vehicle, telematics data can be combined with data from other sources, including on-board sensors that monitor speed, fuel consumption, and much more. Some solutions even incorporate on-board diagnostics (OBD) scanners, bluetooth data, dash cams, and other pieces of hardware.
How Does Telematics Work?
Telematics works through its connection with the vehicle’s ODB-II or controller area network (CAN-BUS) port, the black box continuously collects both vehicular and GPS data. This information is transmitted to a central server via an on-board modem.
The cloud-based server processes this raw data, turning it into useful insight for the end user – the fleet manager, who can access the breakdown through the web or via a dedicated app. Collected data can vary, but usually includes:
Vehicle speed
The speed of the vehicle at every point of its journey, including during acceleration and deceleration.
Vehicle position
Telematics leverages GPS to pinpoint a vehicle’s exact position.
Route distance
By keeping track of vehicle movement, telematics measures the remaining distance of each journey.
Idling time
Telematics can collect information related to engine idling time.
Braking time
This refers to the time it takes for a vehicle to come to a complete stop once the brakes have been applied.
Fuel consumption
Fleet managers can monitor how fuel efficient their vehicles are through telematics.
This information gives fleet managers an intimate knowledge of their drivers and vehicles, allowing them to schedule preventive maintenance, issue live instructions to drivers, and ultimately give their fleet efficiency a shot in the arm.
Benefits of Telematics in Fleet Management
As previously mentioned, telematics has a wide array of uses and benefits across several industries. We’ve listed some of them below.
Reduced costs
Telematics is, among other things, an invaluable savings tool. For example, fleet managers can identify potential disruptions, such as a queue caused by a traffic collision, and redirect their vehicles accordingly. This saves time and cuts down on engine idling time.
Improved health and safety
With real-time monitoring, telematics can be used to alert drivers to potential safety issues or risky behaviors, such as speeding or harsh braking. This will not only boost the safety of your drivers, but the public as well – and potentially spare a costly lawsuit.
Increased productivity
In the context of fleet management, telematics is an important tool for boosting productivity. To begin with, receiving data in near real-time can help managers to make proactive maintenance decisions, rather than losing time when a vehicle breaks down on the road.
Streamlined processes
By collating all your fleet data into one easy-to-use dashboard, telematics systems streamline workflows and simplify your everyday operations. Users can monitor their vehicle and driver behavior, and keep track of their non-motorized assets, without having to juggle multiple providers. Forecasting can also be improved with enough data: In fact, an October 2025 Tech.co survey found 20% of logistics professionals want to invest in better data analytics for forecasting and planning.
Better drivers
Telematics allows you to upskill your drivers by giving you a comprehensive view of their behavior. View their speed, braking time, adherence to the law – and even accurately track their working hours. Ultimately, this will ensure that your drivers are good ambassadors for your brand, and allow you to fairly issue performance-based incentives.
Compliance
Use telematics to keep on top of regulatory compliance, such as Hours of Service (HOS) regulations. This will ensure your drivers aren’t working too much, which could have a positive knock-on effect on their safety.
GPS vs Telematics: What’s the Difference?
GPS tracking and telematics are often used interchangeably. However, this is slightly misleading. While GPS refers exclusively to satellite-based location tracking, telematics is the collection of telemetry data from assets or vehicles and the transmission to fleet management systems.
Like telematics, GPS data is central to fleet management. GPS technology can pinpoint exact locations by sending satellite signals to a receiver, which emits a unique signal containing information about its location and timing. It’s the backbone of mapping services and navigation systems – giving fleet managers up-to-the-minute information on their vehicles and assets.
GPS forms an important part of a functioning telematics system. Precise location data is combined with readings from various on-board sensors to build a complete picture of driver and vehicle activity. From this, fleet managers can make informed decisions to boost efficiency and cut costs.
How Much do Telematics Systems Cost?
Telematics systems usually incur upfront costs for additional hardware, which can range from $50 to $200. Monthly fees, meanwhile, can vary from $15 to $40. You might also be required to pay installation fees, as well as ongoing maintenance costs.
As mentioned above, telematics systems can vary in functionality level, which has a knock-on effect on costs. There are also unique factors to be taken into account when it comes to pricing. The size of your fleet, the cargo, and the level of required installation, to name just a few. Unsurprisingly, for instance, larger fleets command bigger costs – although the cost per vehicle is typically lower.
While telematics and wider fleet management software can be expensive, it’s important to bear in mind that it can be highly cost-saving in the long run. Not only does telematics help you to save on fuel consumption, but it can be used to optimize payroll management by accurately tracking your employees’ working hours.
For the end user, there’s a lot to consider before you commit to your chosen provider. Does the company offer free installation? Is there a minimum contract length? What is the cost per unit? Our dedicated team of researchers evaluated 10 of the best fleet management software providers to find the best features, price, level of customer support, and more.
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Price from
The typical lowest starting price. The lowest price available for your business will depend on your needs
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Free trial or demo
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Fuel card integration
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Try now
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BEST OVERALL
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Verizon Connect Reveal |
Samsara |
Fleetio |
Motive (formerly KeepTruckin) |
Geotab |
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Custom (typically from $23.50/vehicle/month) |
Custom (typically from $27/vehicle/month) |
$4/vehicle/month |
Custom |
Custom |
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Free demo |
30-day free trial — hardware and software |
14-day free trial |
Free demo |
Free demo |
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| Try Verizon | Try Samsara | Compare Quotes | Visit Motive | Compare Quotes |
Final Thoughts on Telematics
Telematics is the cornerstone of fleet management. Optimize the performance of your vehicles, with an unmatched level of insight into driver behavior and vehicle activity, while boosting your bottom line. From monitoring fuel consumption to analyzing braking time, telematics gives fleet managers all the information they need to carry out their everyday tasks – without rolling the dice.
