How Vehicle Tracking Systems Work?

Vehicle tracking software solutions are indispensable for the modern transportation industry. These advanced systems help fleet managers collect, process and transfer data around the vehicle’s real-time location, performance, and driver behaviour. 

Let’s explore complete mechanics or processes to understand the workings of real time vehicle tracking systems, their components, and how they enhance fleet efficiency & safety. 

How Vehicle Tracking Systems Work? Beginners Know-how!

  •  Selecting Vehicle Tracking Systems

GPS vehicle tracking systems consist of the following components:

  1. a) GPS (Global Positioning System)

GPS is the main component of tracking solutions. GPS trackers help extract the precise location of vehicles anywhere on Earth. GPS satellites in orbit send signals to GPS receivers (often mounted on the vehicle’s dashboard). The process provides accurate locational data for easy mapping and navigation. 

  1. b)  OBD-II Port (On-Board Diagnostics)

Tracking software solutions for vehicle work in unison with the OBD-II port (often located under the dashboard). This OBD-II port offers intel into the vehicle’s internal systems. This helps telematics solutions inside comprehensive GPS vehicle tracking software gather information around:

  • Engine health and performance
  • Fuel consumption
  • Emissions, and lots more.
  1. c) Telematics Device

The telematics device is the core component responsible for collecting and transmitting data in a simpler format. It processes information from various sources, including the GPS receiver and OBD-II port, and sends this data to a remote server using cellular or satellite communication. 

Modern telematics devices are very easy to install, as they are compact, and stand as a solid choice for both personal and commercial vehicles.

  •  Data Collection and Transmission

  1. a) Real-Time Tracking

GPS data is continuously collected to track the vehicle’s location and movement in real-time. This information can be used for:

  • Route optimization.
  • Monitoring driver behavior.
  • And providing accurate ETAs (Estimated Time of Arrival).
  1. b) Vehicle Diagnostics

The telematics device communicates with the OBD-II port (situated inside the vehicle). It helps retrieve data related to:

  1. Engine performance
  2. Diagnostic trouble codes,
  3. Fuel efficiency
  4. And more vehicle-specific data

All the above information helps in scheduling maintenance proactively and reduces the risks of unexpected breakdowns.

  1. c) Driver Behavior Monitoring

GPS vehicle tracking systems often include GPS trackers & sensors that help monitor driver behavior patterns, vehicle idling, etc. These sensors can track factors such as overspeed, harsh acceleration or braking, and even seatbelt usage. 

Fleet managers by analyzing the above data through vehicle tracking software can inculcate safe driving practices and reduce accidents.

3. Data Transmission

Telematics devices’ collected data is further transmitted to a remote server for further storage and analysis. This level of communication and transmission mainly happens through cellular networks or satellite connections. It all depends on the system’s design and coverage requirements. 

Many owners prefer to use cloud or Saas-based, real time vehicle tracking systems as a part of fleet management solutions — as they stand very easy to access and safe to manage.

4.  Data Analysis & Reporting

  •  Analytics Software

Telematics data is processed and analyzed using specialized vehicle tracking software. Fleet managers or other stakeholders can easily access such software to gain insights into:

  • Vehicle & engine performance.
  • Driver behavior.
  • And overall operational efficiency.


  •  Alerts & reports

GPS tracking systems provide alerts whenever any deviation is observed. Moreover, the system generated updated reports enlisting analysis on:

  • Fuel consumption
  • Vehicle maintenance needs
  • Driver safety scores, and lots more. 

Alerts are sent to the fleet managers in real-time over vehicle tracking software, whenever specific events like overspeeding or engine faults are discovered. 

Read Also:- Vehicle Health Monitoring System: Benefits, Features & How it Works?

Why Go For GPS Vehicle Tracking Systems?

  • Seamless driver behavior monitoring

Video tracking systems come with GPS trackers & sensors that help alert drivers of potential collision risks. In force with video-based driver behavior monitoring solutions, it gets easy to look into driver in-cabin and on-road activities. It can help ascertain when the driver is speeding, putting sudden brakes, or violating traffic rules. 

  •  Improved Fleet Management

Telematics data in vehicle tracking systems and fuel monitoring systems helps fleet managers optimise routes, reduce fuel consumption, and plan maintenance proactively. This helps fleet managers save costs and improve fleet operational efficiency.

3. Enhanced Driver Safety

These ystems solutions in force with ADAS systems help monitor driver behavior to promote safe driving habits. This helps drivers increase their skills on the road and stay compliant with insurance premiums by having good safety records.

4. Asset Protection

Most vehicle management software as a part of asset monitoring solutions helps with real-time tracking and even provides scope to geofence safe zones to ensure the assets or vehicles are traversing on the safest routes. If by any chance, the vehicle gets lost or stolen, most software solutions shoot instant notifications or SoS alarms to locate them.

5. Environmental Impact Reduction

Such solutions in force with route planning and optimisation solutions help find the most optimal routes, which helps reduce vehicle’s time on the road, decreases idle time, and helps trim carbon emissions in the environment. 

This leads to lower fuel consumption, reduced emissions, and more environmental sustainability.

6.  Save on Insurance Premiums

By sharing telematics data and video footage with insurance companies, and highlighting the safe driving skills of drivers, fleet managers can enjoy lower premiums.

7. Better Compliance and Reporting

Telematics systems help fleet businesses stay compliant with regulations around:

  • Vehicle maintenance
  • Driver hours
  • Carbon emissions

This helps with automated reporting and eases up administrative tasks.


Vehicle tracking systems are transforming the way we operate and manage vehicles. By helping collect, analyze, and transmit data about vehicle performance and driver behavior, GPS vehicle tracking solutions offer countless benefits. From improved vehicle safety and reduced operating costs to enhanced environmental sustainability – the vehicle tracking software helps check them all.

With advancing technology and logistics business, custom GPS tracking software is the need of the hour. TrackoBit offers a comprehensive vehicle tracking system — as per your problem statements and industry standards. Start with a free demo now!


Read more:- How Vehicle Tracking Systems Work? Beginners Guide