A Technological Insight Into The Benefits of Telematics

Telematics is the technology of monitoring cars, trucks, equipment and other assets by using a combination of GPS technology and on-board diagnostics (OBD) to plot the vehicle’s movements on a computerised map. Telematics is also known as fleet tracking or GPS vehicle tracking.

Telematics is a relatively new type of smart technology that is revolutionising the technology of transportation. Morden companies are using telematics as an asset management tool for monitoring their fleets. A vehicle installed with telematics can relay data such as GPS location, vehicle performance and fuel efficiency.

Telematics is an interdisciplinary technology that encompasses:

  • telecommunications
  • vehicular technologies
  • electrical engineering
  • instrumentation engineering
  • wireless communications
  • computer science
  • etc

Components of a telematics systems?

A telematics system is centred around a highly intelligent computer in your vehicle with the ability to report almost every parameter of your vehicle, such as:

  • Vehicle speed
  • Idling time
  • Fuel use
  • Tire pressure
  • and many more.

To cap it all, the collected information from the vehicle is recorded via a small, telematics device that plugs into the OBD II or CAN-BUS port. A modem and sim card in the telematics device then enables communication with the mother company via cellular network.

Telematics block diagram


Benefits of telematics

Lowers vehicle insurance costs

One major benefit of telematics is the saving on insurance premiums that can be made. Transportation companies can now save significant sums of money by outfitting their fleet with telematics as this allows insurance companies to actively track how safely vehicles are being driven. In insurance, high risk means high premiums and the fact that telematics reduces vehicles’ risks means that the premiums will be lower.

Many insurance companies appreciate the benefits of vehicle telematics and actually offers significant insurance discounts for companies using the technology. Such insurance companies understand the value of telematics bring in terms of monitoring driver safety, theft prevention, and vehicle upkeep.

Ensures safe driving

Companies can now track their vehicles with telematics to see how safe the drivers are using the vehicles. Using this data they can promote safe driving by providing incentives to drivers who drive safely.

The introduction of driver incentives based on safe and efficient driving makes the drivers happy and encourages them to maintain their standards. It has a positive effect on both the company and the drivers. Drivers will be eager for the incentives, whilst the company will achieve lower insurance costs.

Ensures fuel saving

Safer and efficient driving due to telematics system leads to efficient fuel usage. Lower fuel costs for trucking company means, the clients get lower prices while the business becomes more profitable.

Lowers maintenance costs

As vehicles are monitored with telematics, the drivers become efficient and this reduces the wear and tear of the vehicles. This again saves the company more money.

Enables setting of geofences

A geofence is an invisible GPS restriction of an area. When a vehicle fitting with telematics crosses the geofence the system GPS triggers a response to the company. Geofencing is used in creating virtual boundaries around specific geographic locations where the vehicle is not supposed to cross. The area might be as warehouses, distribution centers, delivery destinations or distribution routes.

If the vehicle crosses these boundaries, the telematics system will trigger an alarm to the fleet managers because it could mean vehicle theft.


Telematics is a powerful technology that improves the efficiency of transportation companies in terms of:

  • insurance costs
  • driver satisfaction
  • maintenance costs
  • and fuel consumption.

Sydney Chako

Mathematics, Chemistry and Physics teacher at Sytech Learning Academy. From Junior Secondary School to Tertiary Level Engineering Mathematics and Engineering Science.

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