Written by Pam Barrometro Updated on 1 February 2023 On this page What is telematics? A simple definition How telematics works How can a telematics system benefit my fleet business? How much does fleet telematics cost? Next steps FAQs Expand Our site is reader-supported – by clicking our links, we can match you with a potential supplier, and we may earn a small commission for this referral. Telematics is a powerful fleet management tool that allows you to gather a wide range of information on your vehicles, such as location, movement, fuel consumption, diagnostics, and maintenance status. Since its inception in the 70s, it’s fast become every fleet manager’s best friend, providing the lowdown on everything that’s happening in your entire fleet and helping you reduce fleet costs, maximise your profits, and stay on track with compliance.In this article, we'll delve into the world of telematics, explore what it is, how it works, and the many ways it can benefit your business. We'll also cover the costs involved in a telematics system and address some frequently asked questions to help you better understand how telematics can be applied to your business. If you want to boost your fleet’s productivity and streamline your business using telematics, then read on. What is telematics? A simple definition“Telematics” is the hybrid child of “telecommunications” and “informatics.” Today, telematics is widely used in fleet management and has become an essential tool for managing commercial fleetsTelematics is the use of the Global Position System (GPS) and other wireless monitoring devices to gather information on your vehicles and other mobile assets. Telematics keeps you in the loop of everything that’s happening in your fleet, such as driver speed and behaviour, fuel consumption, engine diagnostics, and maintenance status.This data is relayed to your fleet manager and will be used to make better decisions about how to effectively manage your vehicles and your drivers. With telematics, you can send, receive, and store a variety of data on your whole fleet. How telematics worksAt the core of a telematics system is the telematics device, which is typically a SIM-enabled GPS tracking device installed in your mobile assets or your vehicle’s onboard diagnostics (ODBII) port. Each device gathers a wide range of information on your vehicles and wirelessly relays and stores this data in a secure cloud-based hub, which you and your fleet manager can access via your PC or mobile.Telematics helps you track and monitor a wide range of data including the location, speed, movement, and status of your vehicles. This information is then automatically compiled into an uncomplicated dashboard so you can have valuable insight into your fleet's performance. With this information, you can better manage your drivers, reduce fuel costs, and improve overall fleet efficiency. Meanwhile, your drivers can review their route, tasks, and driving performance via their mobile or tablet. Some telematics providers also offer in-cab audio alerts for risky driving behaviours such as distracted driving and speeding. To learn more about the best telematics devices available on the market right now, you can check out our curated list of the best GPS fleet tracking systems for Australian businesses. Are you looking for a vehicle tracking system? Save by comparing tailored quotes Get free quotes How can a telematics system benefit my fleet business?Whether you have one or a hundred vehicles, telematics can help ensure your workforce remains running smoothly and efficiently. Here are a few ways in which telematics can help you manage your fleet better: Real-time location trackingThe most basic offering of a telematics device is tracking the location and movement of any and/or all vehicles in your fleet. Telematics lets you know where your vehicles are in real time and provide you with reports of their movement throughout the day. It also allows you to set up geofences or virtual borders to limit the movement of your vehicles. It’s like having a private detective for each of your vehicles. With telematics, you can rest assured that your vehicles are where you want them to be. Just note that this sleuth device must abide by certain laws – even Sherlock can’t bypass the rules. If you’re not sure if it’s ok to install a GPS device in your vehicles, you can check out our updated Australian vehicle tracking laws. Spoiler alert: the rules differ per state, but it is legal to install a GPS tracking device. However, you must inform your drivers about it and give them ample notice before subjecting them to Big Brother’s watchful eyes. Vehicle safetyIn addition to providing 24/7 visibility of your fleet, many telematics devices are equipped with powerful alerts for device tampering, unauthorised usage, and out-of-hours driving. Considering one car is stolen every 12 minutes in Australia, theft prevention alerts can save your business from huge losses. With the right telematics device, you can get alerted as soon as the attempt takes place, and you can alert the authorities to where your vehicles are via its real-time location tracking abilities. Driver behaviour monitoringTo improve driving habits and reduce accidents, telematics can be used to monitor erratic driving behaviours, such as sudden braking, speeding, and excessive idling.Wondering what we mean by “excessive” idling? Well, it could mean your driver leaving your vehicles on during short breaks or leaving your truck running the whole weekend. Yikes!With telematics, you can monitor your drivers’ habits, and better manage them by setting up alerts and scoreboard systems that give a performance overview of each of your drivers. Job managementTelematics devices can make job management and dispatching a breeze for both fleet managers and drivers. Imagine sending and receiving job assignments with the help of an AI butler that organises all the paperwork for you, from client details and recommended routes to proof of delivery, and even client reviews. It’s then all stored in one place for easy access and review. Improve customer serviceTelematics can be used to track the location of your delivery fleet in real time, allowing for better delivery times and improved customer service. It also enables you to send your customers the ETA of your drivers, keeping them informed about where their packages are. Simplify complianceIf you’re a business owner, compliance is probably at the top of your major fleet concerns. Telematics can help you comply with electronic logging device (ELD) regulations, which mandate the use of electronic devices to record your drivers' hours of service (HOS).This is to ensure your drivers only work the appropriate amount of hours, and do not overwork – extremely important considering the most significant contributor to traumatic injuries at work is vehicle use. This will help you avoid hefty fines and penalties.Reduce fleet costsMany telematics devices are equipped with auto-route optimization features that lead to higher productivity, less time spent on the road, lower fuel waste, and reduced emissions. With auto-route optimization, your vehicles are automatically rerouted to the quickest and shortest path toward your destination, while dodging traffic congestion and construction sites. Additionally, telematics also allows you to monitor your fuel consumption so you can identify where you need to make adjustments and where you can improve fleet productivity and fuel efficiency. Automate maintenanceAnother prime factor that can reduce fleet costs is preventative maintenance. Telematics can help monitor the status of your vehicles and provide alerts when maintenance is needed, so you can keep your vehicle in optimal condition, minimise downtime, and avoid costly repairs. Many telematics devices are equipped with powerful features to help you stay on top of your preventative maintenance schedule, including automatic alerts and diagnostic reports. These let you know when there's a minor issue with your vehicles, so you can take action and prevent small wear and tear from becoming a bigger problem. Furthermore, telematics devices keep digital logs of all your service history repairs and maintenance records, so you don’t need to bother taking down notes and keeping manual receipts. Compare tailored quotes from leading telematics providers in Australia Get free quotes ▶ Read more: The Benefits of Fleet Management and Vehicle Tracking Systems How much does fleet telematics cost?The cost of your fleet telematics system will vary according to your contract length, fleet size, and the depth of features included in your package. In Australia, a basic vehicle tracking system can be rented for around $10 per vehicle per month, while advanced versions cost upwards of $30 per vehicle per month.Depending on your supplier, you may also have to pay upfront device costs. Additionally, you may have the option to purchase the telematics equipment or lease it, so it's important to consider the pros and cons of each option and determine the best fit for your business. Is that a sigh we hear? Don’t worry, we’ve compiled everything you need to know about vehicle tracking systems cost, so you don’t drown in endless research. Next stepsWith the power of telematics, you’ll be able to gather a wide range of data on your fleet by installing a SIM-enabled GPS tracking device in your vehicle or mobile assets. The GPS, sensors, and other wireless tracking devices will allow you to track and monitor the location, movement and engine status of your vehicle as well as monitor your driver and their behaviour – a plus that ensures you stay on top of ELD compliance.All of this data is then sent and stored in a secure cloud-based location which you and your fleet manager can access in real time via PC or mobile. Telematics can also help you gain a competitive edge by providing you with a comprehensive data set to help you optimise your fleet.If you want to take your fleet management game to the next level, you can use our GPS quote comparison tool. Simply let us know about what you need and we’ll connect you with leading providers who will then get in touch with you with tailored, obligation-free quotes. FAQs What does telematics do? Telematics collects data on your vehicles and mobile assets and sends it to a cloud-based platform for storage. This allows you and your fleet managers to access this data in real time and utilise it to better manage your fleet. With telematics, you can get in-depth insights into your fleet’s operations and make data-driven decisions to optimise your fleet’s efficiency, reduce costs, and improve vehicle and driver safety. What is a telematics device in a car? A telematics device in your car is typically a SIM-enabled GPS tracking device that you plug into your On-Board Diagnostic II (OBDII) port. It can also include other wireless monitoring devices, such as dash cams, cargo sensors, and asset trackers. What is the difference between GPS and telematics? GPS is just one part of telematics. Global Positioning System (GPS) trackers primarily provide your vehicle's location information using GPS satellites. Telematics, on the other hand, integrates information from your GPS tracker and other telecommunications devices and gives you the power to monitor everything in your fleet.Aside from real-time location, you can receive, send, and store information on your fleet, including vehicle status, driver behaviour, and fuel consumption. What are examples of telematics? Telematics comes in many forms and has a wide variety of uses. Here are some of the most useful telematics devices you can use to monitor your fleet:GPS trackers: These come with a variety of functionalities, ranging from basic real-time location tracking to in-depth fleet management. Prices often vary depending on your device's features, contract length, and fleet size.Asset trackers: They work a lot like GPS trackers and similarly come with a varied depth of features, enabling you to keep track of your asset’s movements, including when they’re powered on and off. They are often installed in heavy equipment, containers, trailers, and trucks. They are equipped with alerts to ensure the safety of your assets, including unauthorised usage and out-of-hours alerts.Video telematics: Also known as dash cams, it comes in different forms and offers a variety of features. Two popular designs are driver-facing dash cams, which allow you to closely monitor driver behaviour; and road-facing dash cams, which provide crucial evidence in the event of an incident. Video telematics is often equipped with alerts for tailgating, speeding, idling, and collisions.Cargo sensors: They are able to detect cargo movement, giving you insight into your cargo's location and movement. Some sensors are equipped with cameras that give you 24/7 visibility of your cargo, enabling you to ensure that your cargo is being handled correctly, helping prevent cargo damage and loss. Written by: Pam Barrometro Writer With over six years of experience helping businesses scale through strategic marketing research, Pam delivers the most useful tech advice for small businesses and beyond. At Expert Market, she probes into the world of fleet management systems to help business owners get the most bang for their buck.