The GPS fleet tracking system provides significant benefits in fleet management by providing real-time information on the location and movement of individual vehicles. This facility helps get a clear idea of the performance and efficiency of entire operations. Business owners looking for a fleet management system with advanced GPS technologies must consider the cost and the return on investment (ROI) to decide on suitable fleet tracking systems to streamline their operations. The cost structure varies from one system to another depending on the following factors:
- Whether you go for the basic version or advanced features in the system
- Whether you purchase and own the system or take it on a lease basis
- Any additional devices or customized features you want to add to your system
- The period of your contract in case of lease or rent
- The number of vehicles covered under the tracking system
The price may vary within a wide span, but you have to decide how best it serves your requirements and how the system helps you recover the investment cost and drive your business towards profitability.
The Cost Difference Factors
You need to pay more for a more advanced and sophisticated system. The primary objective of installing a GPS tracking system is to manage vehicle operations more smoothly while ensuring better efficiency, safety, compliance, and customer service. The advanced systems are more expensive than the basic systems but contribute to greater profitability in the long run.
The more efficient the system, the more are chances of making your operations productive and cost-effective. Certain factors distinguish between a basic and a high-end system. We will discuss this in detail as follows:
- The Features
The cost of the hardware varies according to the features provided. The features of the tracking system and corresponding prices may vary widely between basic and advanced. The basic facilities include tracking the vehicle routes, providing an update, and generating alerts like start and stop, idling, and route deviations. These features allow fleet managers to keep track of vehicle routes but do not provide better control facilities on vehicle movements and overall fleet operations.
On the other hand, sophisticated systems provide features, that allow the fleet owners to monitor driver performance and fuel consumption. You can receive reports on the truck’s condition and maintenance needs. All these help plan the route and save time. It also helps control driver behaviour and improve vehicle performance. It leads to reduced fuel costs and better customer service. The basic system involves less initial investment, but high-end systems provide more benefits afterwards.
- The Frequency of data update
The utility of GPS tracking depends on the frequency at which it sends information about the location and movements of vehicles. The capability of the system to refresh data faster makes it more reliable and convenient for the managers. There is no scope of guesswork as you can receive the exact update of location and route at frequent intervals. The extra advantage that you get from the system justifies the cost. You can choose the interval for data update and need to pay more for a faster system.
- Cost of Purchase Vs Cost of subscription
There are considerable cost differences between a purchased system and a system taken on lease or monthly subscription. One can purchase both hardware and software or install the hardware and pay a monthly subscription for the software support. You can also pay monthly charges for both hardware and software support.
Both options have certain advantages and disadvantages that you must consider before looking at their cost structure. You purchase a total system, including hardware and software, and you become a licensed holder of the system.
The upfront cost is higher, and you have to bear the cost of maintenance and update. In the subscription scheme, the initial cost is less, and the provider will take care of updates and system maintenance as required. But, your added-up expenses may be more over time. You also can’t relocate or replace the device without involving the supplier.
- Cost of Additional Features
The initial cost of purchase and the monthly fees do not include charges for additional features that you need to incorporate into your system to suit your business needs. Many companies offer extra features as a package that you may like to include to make your process more efficient and streamlined.
The supplier will charge an additional cost for these add-on features. An important feature is the Electronic Logging Device (ELD) that ensures FMCSA regulations. Other features include accident indicators, temperature sensors, driver id kits, etc. The service cost varies depending on the features and their compatibility with your fleet system.
- Additional Charges
Extra charges may apply to the service as decided by the supplier. The device installation may be free, but many companies charge extra to integrate hardware with specific software tools, as required for your business. Some companies also apply termination charges if you discontinue the contract. If you use the digital devices provided by the supplier, there may be network charges that you have to pay.
How To Compare Costs?
The following tips will help you make the cost comparison and calculate the ROI to decide on the best product.
- Compare Quotes From Suppliers
You can conveniently receive quotes from different service providers that you can compare based on your requirements and then make a suitable choice.
- Check the Contract-Period
You need to look at the period of contract or lease after which you can renew it. You must be aware of the auto-renewal facilities at the end of the contract period. There has to be an option to stop the renewal and termination of the contract as required.
- Cancellation Period
Most companies offer a free trial and cancellation period of 15-30 days after the initial installation, during which you can use the system and then decide not to continue and cancel the contract without being charged.
- Option for upgrade
You may need to upgrade the system when you scale up the business. You analyze the cost involvement to support your expanded operations and then decide accordingly.
The Price Range of Different Products
Matrack: The monthly charge is $14.95. The hardware is free, and there is no cancellation charge.
Verizon Connect –Monthly charge per vehicle starts from $50 for the basic plan that may go up to $250 depending on the features and facilities you may like to avail of under this plan.
Quartix – It offers a basic plan for $14.90 per month per vehicle which may increase to $22.90 with additional features.
Samsara- It is one of the fastest devices with a refresh rate of 30 seconds and offers a monthly plan of $30 per vehicle.
GPS Insight – It has a slower refresh rate of five minutes which justifies the lower price of $14.95 per vehicle per month.
Conclusion
Effective fleet management system with GPS tracking serves the purpose of enhancing efficiency, improving profitability, and ensuring better customer service. Owners need to perform a cost-benefit analysis before buying a system.
