Over the past few years, there have been immense advances in the technology available to monitor vehicle movements and use.
Hundreds of companies have installed telematics systems in their vehicles, mainly in vans, and as a result are reporting savings of running into hundreds of thousands of pounds.
The leasing industry has been offering tracking systems as part of a vehicle's monthly lease for many years, but it has struggled to persuade large numbers of fleet operators to take the plunge and adopt the technology.
But recently, leasing companies are showing a renewed interest in the technology and its potential benefits.
As well as customers being able to track their vehicles more effectively, leasing companies can also keep an accurate mileage record, so vehicles can be proactively booked in for servicing, or contracts can be rewritten if a driver is covering more than the expected mileage.
Although the technology behind telematics systems is complicated, the role they play is relatively simple.
A transmitter placed in a vehicle can send back a wide range of information about a car's performance, depending on what the system has been set up to monitor.
The most commonly used systems are for tracking vehicle location, either because one has been stolen or to because drivers may quickly need to be pinpointed. This is common in van fleets where a vehicle may need to be diverted at short notice, say to deliver or collect a package.
But systems can do a whole lot more, ranging from monitoring speed, braking, indicator use and acceleration, to whether a door is open and whether a vehicle has left a 'ring-fenced' area without authorisation.
One of the first leasing companies to offer telematics services to its customers was GE Capital Fleet Services.
In 2000, its Fleet Command system was recognised at the Fleet News Awards with the Innovation of the Year trophy.
The judges said: 'An overwhelming winner. Genuinely innovative, Fleet Command sets the benchmark for the future. It uses tried and tested technology to radically improve pro-active fleet management. It will reduce costs and improve productivity.'
Lex Vehicle Leasing currently offers vehicle telematics services to its customers through Cybit as an added-value service.
The firm said that current take-up from fleet customers of the 120,000-vehicle fleet was relatively small, with 2,500 cars using the service. But interest and enquiries are still running high.
The firm said many fleet managers had the devices fitted for the purpose of reducing the amount of penalty notices and speeding fines.
The employer can react to drivers who they know through their regular vehicle reports regularly break the speed limit.
ALD Automotive plans to implement an industry-leading telemetry system fitted to all new leased vehicles within the next few months following a pilot scheme that was run on 3,200 vehicles some 18 months ago.
With the development of telemetry and associated software over the past 18 months, ALD believes it has cracked the issue of cost that has deterred many fleets from taking telematics services.
The firm says technology is fundamental to its success as it increases efficiencies and makes life easier for both fleet decision-makers and company car drivers.
The telematics system, called ProFleet2 and fitted from the spring, will also enable fleet decision-makers to monitor key reports from their vehicles using online services.
The technology will 'flag-up' a two month/2,000-mile warning that a service is imminent, thus enabling ALD Automotive to contact drivers and book cars in to dealerships.
In the modern health and safety conscious environment, the technology will also enable fleet decision-makers to ensure they are meeting their duty of care to drivers.
ALD Automotive managing director Keith Allen said: 'The system is designed to assist in the management of health and safety and duty of care obligations and transmit information, the key element being accurate mileage reporting.
'We have developed a range of software applications to receive and analyse data from the telemetry unit within the car which will assist fleet administrators in proactively managing their fleets.
'We believe technology is the future. As a contract hire and leasing company we have got to be able to add value to our core vehicle offering. We can only add value by being innovative and giving additional services that benefit both our customers and ALD.
'The leasing industry has always been very good at reacting to problems. However, with an increasing amount of health and safety and duty of care legislation being targeted at the fleet industry it is important that, as a vehicle provider, we are pro-active and know what is happening to our vehicles and that the driver is safe 24/7.'
Allen said because fleets and the leasing company would be able to keep a closer eye on vehicles, it should also lead to reduced wear and tear costs and protect residual values.
He added: 'We have designed the technology to allow us to remotely manage our cars 24 hours a day. We can advise fleets and company car drivers if any problems occur with the vehicle that might impair its performance and therefore its safety.'
However, Allen stressed that the service should not be seen as a tracking device, providing drivers with services, rather than watching their every move.
Already, industry experts are predicting that large scale use of vehicle telematics systems could radically alter the way the automotive industry works.
Wavecom marketing director Olivier Beaujard said added-value services were now part and parcel of the automotive sector, and the next 'big thing' was widely expected to be a surge in the telematics market.
He said: 'We predict the market will grow from 2.9 million applications in 2003 to 11 million by 2006. Telematics is quickly becoming the high priority for in-vehicle market growth, with a tremendous potential return on investment. But its success extends beyond the vehicle itself to the surrounding transport infrastructure. Perhaps the biggest potential is that of radically altering the way the automotive industry works, looking not just at automotive culture but transportation as a whole, with governments, transportation providers, fleet companies, motorists and so on all working together towards a common goal.'
Trial gave wealth of information
FLEET News was one of the first British company car fleets to trial in-vehicle telematics as an active vehicle management tool. In 1999, we took delivery of a Ford Cougar equipped with the same Data Collection Unit that GE Capital had fitted to all its new lease vehicles.
The DCU worked in conjunction with satellite technology to track a vehicle every minute of the day and record its movements. It recorded detailed journey information, such as time of travel, journey length, average speed, destination and duration of visit.
The data was then downloaded automatically via satellite and analysed by Minorplanet software to provide valuable management information.
Reports included the identification of the quickest routes for regular journeys, an independent endorsement of drivers' hours for overtime claims, a practical measure of work journeys for P11D business mileage purposes, and exception reporting that indicated occasions when a driver exceeded the speed limit. It could also to see how the fuel consumption of the car changed, depending on who was driving it.