What are the costs associated with vehicle telematics?

What are the costs associated with vehicle telematics?

  • Telematic systems provide fleet managers with critical real-time data on their fleet
  • Costs are variable, but ROI may occur quickly
  • Data is transmitted to a central location where it can be analyzed

What is fleet telematics?

Telematics. The word didn’t even exist a decade ago. But thanks to the speed of technology, telematics is critical to successful fleet operations. Telematics is the process of transmitting information remotely over long distances. A fleet telematics system usually consists of two components: the device and the software. The device is generally installed in the vehicle’s on-board diagnostic port. The fleet communication software system is most often located at a dispatch center or fleet manager’s office.

Within the trucking industry, companies install telematics devices and accompanying software to collect and transmit a broad range of information. Depending on the type of device installed, that data might include:

The information transmitted by the telematics device gives fleet managers in-depth insights across their whole fleet. Fleets can use these insights to minimize fuel waste and operating expenses, improve fleet safety, monitor asset locations, and proactively identify maintenance issues.

Fleet telematics cost

Most telematics systems currently on the market have reasonably clear-cut costs that you can evaluate.

First, you’ll pay for the device itself. Depending on the size of your fleet, many companies offer quantity discounts.

Real-time data to help you with efficiency

Next, the cost depends on the type of device you choose. Some telematics devices transmit data in real-time, while others transmit at a predetermined interval, such as every hour or half-hour. A device that transmits in real-time is a smarter device that has more complex technology built in. One of the more important aspects of telematics is the ability to receive knowledge and act on it in real-time. Opting for a lower cost device that transmits only at intervals diminishes that benefit.

Real-time monitoring also provides value in a number of other ways, including fleet management. Being able to monitor your fleet in real-time lets you make any necessary adjustments immediately, such as notifying vehicles that may be unnecessarily idling for long periods of time, thereby wasting fuel.

Real-time monitoring may also encourage drivers to be responsible since they are aware their driving habits are being tracked. In some cases, companies have started incentive programs for drivers who consistently show exceptional driving skills and performance.

The third factor that can add to the cost of the device is the number of data points you want to monitor. For example, a device that monitors just the basics may cost less than a device that also monitors engine load, braking speeds and fuel consumption.

Plug-and-play makes installation simple

The next factor affecting overall cost is installation. The best devices are plug-and-play and can be installed quickly and easily into the vehicle diagnostic port. Installation costs can be as low as zero. Other devices may require a technician to install. If you choose a device that needs to be hard-wired or retrofitted, installation costs will be higher.

Monthly subscription fee

Finally, the monthly subscription fee will affect the cost of your fleet telematics system. The information provided by your system is critical to optimizing operations and lowering the cost of doing business, so it’s very important to choose a service provider that is highly rated and very reliable.

If you choose a system solely on price, you may not get the robust features that may be critical to your specific needs.

It’s certainly possible to find fleet telematics solutions cheaper than others. But they may not have the features to help keep your business running smoothly, such as excellent customer support and the ability to analyze the data and provide reports. Choosing a system based on price alone could end up costing you more in wasted fuel, lost time or unplanned maintenance issues.

A solution-driven telematics system can help you make data-driven business decisions that may save your company money, and help you realize a faster return on investment in the telematics system.

Is a fleet telematics system worth the expense?

The best way to reap value from a fleet telematics solution is to plan ahead. Decide what metrics you want to track. Get to know the possible outcomes your system can deliver, and go in with realistic expectations for results. A good system could help you slash expenses, improve safety, reduce the number of behind-the-wheel incidents and elevate customer service.

In a recent article in IoT Business News, fleet telematics was shown to deliver high value and quick return on investment. The most critical thing to remember in obtaining a positive return on investment is planning. By researching all of the positive benefits of telematics, fleet owners will better understand the possible outcomes and subsequently set the appropriate expectations for telematics technology.

There are two important items to remember when planning your fleet telematics systems:

  • Recognize the cost benefits of telematics
  • Set goals for telematics

By planning in advance how the costs will be justified by the benefits, you may realize that in many cases, your return on investment occurs rather quickly. By setting goals such as checking maintenance reports on a bi-weekly or monthly basis, you can use them as benchmarks and see exactly how telematics is working to reduce maintenance costs (by being proactive rather than reactive) versus the costs you had before installing telematics. The diagnostic aspect of a telematics system can warn you of looming vehicle maintenance issues before they become serious. This helps eliminate or at least reduce downtime, which in the end helps your bottom line.

Other benefits of fleet telematics

Almost every benefit associated with the use of telematics will save a company money, either directly or indirectly. These savings easily justify the use of fleet telematics. Additional benefits include:

  • Increased efficiency and productivity of your fleet
  • Improved safety
  • Preventive vehicle maintenance monitoring
  • Driver exoneration in refuting tickets or citations
  • Driver exoneration after collision
  • Reduced fuel waste
  • Reduced operational expenses
  • Optimized payroll management
  • Automated IFTA reports
  • Streamlined communication between vehicle and managers

Find out more about Keep Truckin’s telematics solutions

Learn more about telematics or give us a call at 844-325-9230. You can also send us an email at support@keeptruckin.com.

Our 24/7 active customer support team is always available to help you.

Disclaimer: The information being presented in this article is intended for informational purposes only and does not constitute, and should not be relied upon as, legal or other professional advice. You should contact your attorney to obtain advice with respect to any particular legal matter. No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction.


Jeff Miller

Jeff Miller is an award-winning writer in the energy and transportation industries, a playwright and actor/director, and the author of an Amazon Top 100 book. He is certified by the Department of Homeland Security and Michigan State University in Incident Management and Crisis Communications. He and his wife Beth (also a writer) live in Texas.

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