What is a Telematics System?

September 17, 2022

The field of telematics relies on wireless communications, navigation systems, and computer technology to control remote objects. Its most common application is tracking vehicles in a fleet.

A telematics system records and transmits data about the location and usage of vehicles, including cars and trucks. The data is aggregated in a central location to facilitate fleet management activities. 

The term telematics was first coined in the 1960s by combining telecommunications and informatics. It used to refer to systems that relied on GPS to track asset locations. However, in recent years, it has become synonymous with remote fleet management. 

How Does Telematics Work?

To enable fleet tracking, the vehicles must be equipped with a telematics device. Each device consists of three components: 

  • A GPS sensor to determine the vehicle’s exact location.
  • A computer to measure various readings, such as speed, acceleration, and fuel consumption. 
  • A SIM card to transmit the readings to a cloud server. 

The server collects data from hundreds or thousands of vehicles and other assets. It then feeds that data into a Fleet Management System (FMS), which provides real-time monitoring and alerting capabilities. 

Many FMS also have extensive reporting and analytics features allowing companies to identify top-performing drivers, schedule maintenance, and increase safety, among other things. 

How are Telematics Devices Installed?

Installing a telematics device doesn’t require manipulating the vehicle’s engine. The device simply connects to the vehicle’s onboard diagnostics (OBD-II) or CAN-BUS port and draws a small amount of power from the vehicle’s battery. 

Telematics devices won’t interfere with vehicle electronics or performance. Most modern devices go into standby mode when the vehicle is turned off. Moreover, if the device doesn’t detect movement for a few days, it’ll automatically turn off to preserve the battery. 

Installing a telematics device won’t void the vehicle’s warranty because it’s considered an aftermarket attachment. Therefore, the manufacturer is still responsible for defects caused by the manufacturing process. In the US, the Moss Magnuson Warranty Act prohibits companies from voiding the warranty because the owner has installed a telematics device. 

What are the Benefits of Telematics in Fleet Management Systems?

Many believe a telematics system is merely a set of monitoring tools designed to ensure driver compliance. However, the benefits of a telematic system extend far beyond. 

We’ll briefly touch on a few of them below: 


Access to hundreds of millions of data points creates ample opportunities for optimization. Companies can optimize route planning, fuel consumption, turnaround time, maintenance schedules, and more. 

Cost Savings

As a direct result of efficiency, companies achieve considerable cost reductions. For instance, optimized route planning reduces fuel consumption, while an effective maintenance schedule prevents vehicles from going out of order. 


Real-time alerts and automatic detection of dangerous behavior can significantly increase driver safety. Collision detection is also a vital feature that may save drivers’ lives in emergencies. Finally, telematics allows companies to quickly locate and recover stolen assets. 


As fuel consumption drops, your fleet will have a smaller environmental footprint. Moreover, modern FMS comes with specific features for electric vehicles, allowing you to reduce your carbon emissions further. 


Powerful FMS interface with many other systems to deliver a comprehensive experience to all stakeholders, including customers, drivers, employees, and executives. Some of the integration options include CRM, ERP, and weather service. 

The Future of Telematics

As with many fields, Artificial Intelligence (AI) will have a significant role in the future of telematics. Advanced machine learning algorithms can sift through large datasets to extract patterns and insights. 

These patterns can be used to predict future incidents (e.g., dangerous driver behavior) or identify optimization opportunities (e.g., reduce wait times by sending timely notifications). 

Moreover, real-time AI-enabled analytics allow fleet managers to make timely decisions in case of sudden changes, such as road accidents and changes in the weather. 

The Internet of Things (IoT) and the rise of smart cities are other phenomena that may revolutionize telematics. Soon, telematic devices can communicate with IoT-enabled sensors to automate weighing, loading, unloading, toll payment, and more 

Join Our Newsletter
We never share your info. View our Privacy Policy
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
contact from telegram
Join Our Amazing