5 ways vehicle tracking can save small businesses money

It’s easy for small businesses to write off telematics and vehicle tracking systems as unaffordable technology that’s more suited to the world of large commercial fleets operating across national or international networks. The reality today is somewhat different.

tracking systemThe price of modern commercial fleet management and vehicle tracking device has plummeted, opening the door for small businesses to take advantage of this powerful technology.

Many small businesses will start off subsidising the use of their employees cars or vans (so called ‘grey fleets’) but the principles behind the benefits of vehicle tracking devices remains sound whatever your business model or size of your fleet. This affordability and the accessibility of more accurate GPS and faster mobile broadband technology has allowed economies of scale to be realised even with relatively small fleets of vehicles.

But why would a small fleet based business want to invest in a vehicle tracking device in the first place? Well if you’re a small business, it all comes down to the bottom line and in this article I want to explain five areas where vehicle tracking can save your business money, whether over the long or short term.

1. Driver safety

The ability for telematics devices to record driver behaviour, as well as track location and speed, has allowed fleet based companies of all sizes to gain a remarkable level of insight into the driving habits of their drivers. For the first time, businesses are able to stamp out bad driving habits before they become a problem or lead to an accident on the road.

There are significant benefits for companies that are able to identify and then take action to stamp out dangerous driving. By reducing the risk of your company being involved in a serious accident on the roads (something that has the potential to irreparably damage your company’s reputation) vehicle tracking systems can play a direct part in keeping your insurance premiums low. As mercantile as it sounds, road traffic accidents cost businesses millions of pounds every year. Being able to reduce your risk of being involved in one may not come with a clear ROI, but it could represent a significant saving.

2. Fuel efficiency

As well as allowing you to stamp out dangerous driving habits before they lead to accidents on the road, monitoring driver behaviour through on board telematics systems allow you to increase fuel efficiency across your entire fleet. Over the months and years, bad habits like over revving, sharp breaking and excessive idling can lead to unnecessarily high fuel costs. Research has shown that being able to identify and then stamp out these practices can lower fuel costs for a business by as much as 20%. That’s a significant saving for any size business. 

3. Regulatory compliance

Since 1986 tachographs have been compulsory in Europe. Traditionally these have involved a wax disc that records a vehicle’s speed and distance covered but modern tachographs are digital. If you’re a new business operating a fleet of vehicles registered after the 1st May 2006 then you will be legally obliged to fit digital tachographs in your vehicles and as of 2007 you also need to be able to show the driving and resting times of their drivers.

The ability for vehicle tracking systems to record this information centrally, removes a huge headache for companies when it comes to collating and presenting this information. In fact modern vehicle management systems can produce EU compliant reports in just a few mouse clicks, which certainly beats downloading the information from each vehicle tachograph manually. 

4. Operational efficiency

The financial savings that can be made through the use of vehicle tracking systems are often realised through the collation of data over long periods of time and the rolling out of efficiency programs and work practices based on this data. This data has the potential to empower a company to take well informed steps to improve its operational procedures.

“The most important aspect of an effective solution is the ability to convert large amounts of vehicle-generated telematics data into relevant, actionable business insight,” says Doug Peters, telematics analytics leader at GE Capital Fleet Services. Whether it’s re-sequencing existing routes, re-assigning deliveries or better driver scheduling vehicle tracking data allows companies to optimise workforce efficiency, leading to higher productivity rates as well as better customer service outcomes.

5. Maintenance and repairs

Modern telematics systems can collect a huge range of in-vehicle data, from RPM, seatbelt deployment, fuel level, throttle position and airbag deployment before relaying it back in real-time to a central management system. Much of the data collected can be associated to engine health and it is here that our fifth and final cost saving can be made. The ability to spot engine related problems before they occur can allow fleet based businesses to bring those vehicles in for maintenance or repair before the problem results in a breakdown. This also allows for timely replacement planning, meaning vehicles spend less time with a mechanic and more time on the road.


With the global fleet management software market expected to grow by 21% by 2020, many businesses are realising that the potential ROI of vehicle tracking systems goes far beyond the simple financial input / output equations. “Perhaps the most overlooked and important consideration is how the company uses this new data to change behavior,” says Bruce Horan director of onboard telematics for PHH Arval.

The key word I would use here for any small businesses thinking about investing in a vehicle tracking system is ‘empowerment.’ The ability to record, collect and then act on this data, not allows you to make quick and easy savings but also take informed strategic and operational decisions that will see your workforce become more productive and your business become more profitable over the long term.

A win-win situation in other words.