Fleets thinking of investing in telematics systems have been urged ‘think before you buy’ by one of the major suppliers in the sector.
Navman Wireless, which has been in the UK since the dawn of telematics seven years ago and is now one of its leading players, believes that as the credit crunch begins to bite, many smaller telematic providers will go bust, leaving those who bought their systems with big bills.
Steve Blackburn, Navman Wireless’s sales manager for Europe, the Middle East and Africa, said there were now around 175 firms offering telematics systems in the UK.
However, he warned: “There are some cowboys out there who will sign up fleets to a five-year deal and then go out of business within a year.
"They may be gone but the banks who they owe money to will still expect that money to be paid by the buyer for five years.
“It’s a problem fleets don’t think about and we get many clients in this situation asking if there is anything we can do – and of course in most cases there isn’t.”
According to start-up business research by Barclays, 18% of all new businesses fail within their first year, and 50% fail within three years.
Industry experts suggest that failure rates within the telematics sector are likely to be even higher.
The prospect of more business failures ahead makes it even more crucial for fleets to choose the right firm to deal with.
“The sad thing is that someone can set up a new telematics company in a shed with no research whatsoever and pretend to offer what we do,” said Mr Blackburn.
“It’s a lie and any fleet taken in by this will no doubt suffer financially.”
To help protect fleets from the telematics cowboys, Navman has drawn up a list of 10 top tips for choosing a telematics supplier.
• Consider whether a preferred provider is reputable – ensure it is financially secure, has a health set of accounts, and a trading history of three years or more
• Thoroughly research the available technologies and their possible applications
• Ask to see working systems when investigating potential suppliers and test out the software. If a company has any faith in its product, it should have no objections to leaving customers with live access to its system
• Ask for customer references – and speak to the references
• Ensure a preferred provider is up front about any installation charges – installation should be free
• Find out if, in addition to the fixed costs, there are additional monthly charges – there shouldn’t be
• Ensure the provider has a dedicated R&D resource, rather than this being outsourced to a third party, and find out if the system you opt for can be upgraded during the contract period
• Ensure a preferred provider offers free software and mapping updates
• Select a provider that takes technical responsibility for every aspect of the system’s operation
• Select a telematics provider that offers a system warranty that last the length of the contract