What Are GPS Tracking Devices and How Do They Work?

GPS Fleet Tacking and Management

GPS tracking devices are a vital cog in the fleet management machine, giving you oversight of all driver movements, and insight into the areas where you can make effective change and improvement.

GPS tracking devices can be used for many purposes, but they are especially valuable for managing business-owned cars, vans and trucks, because the information they collect on location and routing can be used to save significantly on fleet management costs.

Below, we’ll take a closer look at exactly how this technology works and how it can be set up to benefit your company.

What are GPS tracking devices?

A GPS tracking device (or GPS tracker) is a portable device that uses a system of satellites to pinpoint its location. GPS tracking devices are used by fleet operators to track the location of the vehicles in their fleet. Once installed, software can be connected to the trackers to show vehicle locations in real time.

GPS actually stands for Global Positioning System and this system is owned by the US government and operated by the US Air Force. Despite being a commonly used name for the technology, it’s just one of many systems operated across the globe. For example the European Union operates Galileo, while China operates BeiDou. All systems are collectively known as the Global Navigation Satellite System (GNSS).

GPS technology emerged in the 1970s when American manufacturing conglomerate Rockwell International launched the Block-I GPS satellite into space, followed by ten more in the 1980s. Initially an experiment to test the merits of the technology, it was limited to US military use and didn’t yet have the capacity for widespread tracking of vehicles.

MOTOsafety OBD GPS Tracker

In 1994, the US Air Force launched 24 more satellites to complete the world’s first fully operational GPS system. The technology was still confined to US military use until 1996 when US President Bill Clinton announced a directive to open up GPS to the consumer market. It was then opened up for businesses and individuals to take advantage of.

Arguably, fleet owners and operators stood to benefit the most from the ability to track their fleet vehicles. However GPS technology was expensive at the beginning, meaning it was only accessible for the wealthiest fleet owners. Fortunately, in the past two decades it has become more widely available for the mass business and consumer market, with lower pricing. Even the average consumer can find the best GPS tracker for their car.

How do GPS trackers work?

GPS trackers use the GNSS network to determine a device’s location, using a process called trilateration. Trilateration is where the tracker compares the relative position of three or more satellites in the network to itself, to determine its latitude, longitude, elevation, and time. Each satellite contains an atomic clock which keeps accurate time.

The combination of information from these satellites sends a signal to the tracker, and this signal contains information that the tracker uses to configure the location of the satellites and its own three dimensional location.

According to the Federal Aviation Administration, a basic GPS service provides accuracy to within approximately 7.0 meters, or 23 feet, 95% of the time, for anywhere on or near the surface of the earth.

Fleet operators use GPS trackers to track the location of the vehicles in their fleet as they journey from point A to point B. Typically each vehicle will have a fixed GPS tracker installed in their engine, or have a portable GPS tracker plugged in. These trackers are usually ‘active’, meaning they send live location data to a fleet tracking software overseen at another location, at all times. ‘Passive’ trackers can also be used but these will only collect data at determined points, meaning they can’t be tracked live, and their data can only be accessed after the driver’s journey has been completed.

Types of GPS trackers for vehicles

There are different types of trackers you can use to track the vehicles in your fleet. Let’s take a look through each type of tracker and see which may suit your business the best.

Hardwired GPS trackers

Hardwire trackers are pretty self explanatory, they are designed to be permanently attached to a vehicle. Usually they are placed under the dashboard, so as to not distract or impact on the drivers other functions.

There’s couple of reasons why you may want to hardwire your GPS tractor. One of most common reasons fleet operators would use a hardwired tracker would be if their fleet lacks an OBD II port to plug in a portable charger. While a lot of vehicles have OBD II ports as a requirement in the United States, vehicles released that before may not.

Security is another issue. While it can be rare, some drivers may attempt to interfere with the GPS tracking system in the vehicle. Hardwired GPS trackers, especially when hidden from view, provide more security than portable or battery powered trackers.

Plug-In or OBD GPS trackers

As we’ve just referred to, plug-in GPS trackers plug into a vehicle’s OBD II port, which has been a requirement in vehicle manufacturing since the mid 1990s. An OBD II port is to allow mechanics to plug their computer read data from vehicle sensors.

Plug-in trackers are also known as OBD trackers and have the simplest vehicle tracking installation process. Unlike hardwire trackers, OBD trackers can be switched between vehicles with ease, allowing for greater flexibility. It’s cost effective too, especially if all of your fleet aren’t on the road all the time, meaning you don’t need a tracker for every vehicle.

OBD trackers are usually placed in and around the steering wheel, where a vehicle’s OBD port is typically situated. The tracker is powered from the port when the vehicle is turned on. The main security concern is the ease in which OBD trackers can be removed, unlike hardwired trackers, meaning theft and damage could occur easily. Learn about the vehicle theft statistics from state to state, so you can be aware of your risk.

Battery powered GPS trackers

Unlike both the OBD tracker and hardwired tracker, a battery powered tracker runs from its own power source. However that doesn’t mean it can’t be used by fleet operators whose vehicles cover large distances every journey. Most battery powered trackers last a few months, with some even lasting beyond a year. However to preserve their battery life, they may not send out updates as regularly as OBD and hardwired trackers

Mobile phone GPS trackers

GPS is now widely available on many devices including mobile phones. A low cost option would be to track a driver’s mobile phone with a simple GPS tracking software. However this option may be messy as you have to incorporate your drivers private mobile phones and there’s a potential for data manipulation by drivers. Most importantly, you won’t get the same level of insights you’d get with a GPS tracker connected to a proper fleet management system.

4 key features of GPS trackers for vehicles

The introduction of GPS technology and its subsequent widespread availability to the market has changed the way fleet operators manage their fleets. Here are a few key features of a standard GPS vehicle tracker.

Live vehicle monitoring

Active GPS trackers, which send live signals to your fleet management software, allow you to monitor the vehicle’s location in real time. This ensures you know exactly where your vehicle is at all times and you can make quick interventions if anything goes wrong for your driver. You can also pick up on any suspicious activity and intervene immediately.

Route management

GPS tracking gives you the power to manage your drivers routes effectively. You can make decisions on the best routes to take and what the best fuel stops are along the route to maximize the efficiency of the journey. GPS tracking also enables you to find the best routes possible to cut down on journey time and get to the consumer quicker if you are a delivery service for example. All of which boosts efficiency, cuts down on costs and improves route optimization.

Driver behavior analysis

One of the big advantages of GPS tracking is the ability to monitor the behavior of your drivers. Before fleet operators adopted GPS tracking they had no way of knowing if their drivers were up to, meaning they could be speeding, using too much fuel or making too many stops along the route. Live GPS tracking eliminates all that, giving your oversight on what your drivers are doing at any time. This data backs you up when instructing your drivers to drive a more fuel efficient and effective way.


Another key feature of GPS tracking is geofencing, which is where you use GPS to set parameters around certain locations and receive a notification when a vehicle has passed through this location. This can be used for the main parking lot to see when vehicles enter and leave, to know when a vehicle has reached its destination and how long it stays there and for other events like if a vehicle crosses into another country. It also allows you to set parameters around locations you don’t want your vehicle to leave for any reason.

Benefits of vehicle tracking for fleet management

GPS tracking plays a crucial role in overall fleet management. The ability to track exactly what your drivers are doing and when gives you the oversight to make effective decisions about your routes, increasing profitability overall.

You can see the fastest routes available, where the best place to refuel is and cut out any unnecessary driver behavior that is costing time and money. Overall the key benefit is to see where the most money is being spent on each journey so you can cut down on these costs and increase profitability for your business overall.

Is GPS tracking right for your business?

GPS tracking can be beneficial to any business with at least one company vehicle, but it should certainly be installed if you manage more than five vehicles in your fleet. The more vehicles and moving parts you have to keep track of, the more potential there is for unnecessary revenue loss due to poor route planning, excessive fuel consumption and bad driver behavior.

GPS tracking eliminates all of this, giving you the the ability to make decisions quickly and save time and money on each journey your drivers take. Verizon Connect’s Fleet Technology Trend Report for 2024 revealed that 62% of GPS users reported a positive ROI from using the technology in their fleet operations.

To ensure you are getting the best value for money on GPS tracking for your business vehicles, read our guide to fleet management costs.

Written by:
Eamonn is an experienced B2B writer and content manager, having managed and grown several B2B business blogs in the fitness and hospitality space.