TL;DR: Most rental businesses already track where their vehicles are, but very few use the connected vehicle data they collect for anything else. The same data, used properly, can lift fleet utilisation, reduce fuel costs, schedule maintenance before breakdowns happen, improve driver behaviour and power dynamic pricing decisions. These five applications consistently separate rental operators using telematics as a tracker from those using it as a margin engine.
Walk through any rental operations team and ask how they use telematics. The answer is almost always the same: "We know where the vehicles are." That is true. It is also a fraction of what the technology can actually do. The connected vehicle data flowing through a typical rental fleet contains everything needed to predict maintenance, improve fuel economy, shape pricing decisions and lift utilisation by double digits. Most operators use about 10% of it. The other 90% sits unused inside the telematics dashboard. The opportunity has never been bigger. The global fleet management market is projected to reach over US$67 billion by 2030, growing at a compound annual growth rate of 15.32% according to Mordor Intelligence, and more than 75% of fleet operators are expected to increase their investment in telematics by 2026 according to ABI Research. The gap between operators who treat telematics as a tracking tool and those who treat it as a data platform is widening every quarter. The financial impact is now well documented. Connected vehicle data is being used to lift fleet utilisation by 10 to 20%, reduce fuel costs by improving driving behaviour, cut unplanned maintenance downtime through early issue detection, support dynamic pricing decisions based on real-time vehicle availability, and create a safer customer experience overall. The rental businesses that pull ahead in 2026 are the ones who stop treating telematics as a back-office tool and start treating it as a growth engine. The five steps below are the practical ways rental operators are using connected vehicle technology to actually move the business forward. None of them require new vehicles. None of them require a major capital investment. What they require is a willingness to do something with the data that is already flowing through the operation every day.
Connected vehicle technologies will shape the future of car rentals!
It is always hard to make a dramatic statement in public without worrying about consequences. In this case, however, we are quite confident to be challenged.
As a Technology Strategist, I increasingly see businesses not only relying on data to operate but invariably find new revenue opportunities that are enabled by it. ‘Data science’ or ‘Machine Learning’ skills have become the hottest selling jobs on LinkedIn and job sites as every organisation continues to invest heavily in building the capability in-house. Despite government scrutiny and heavy-handed regulations such as GDPR, organisations have not lost momentum on their investments in Artificial Intelligence (AI) and data science to stretch the boundaries of what can be achieved through AI.
We see similar innovation being pursued by automobile manufacturers who have understood the potential value of enabling connected technologies within their cars. As a simple example, I own a Jaguar XF which I can remotely lock, unlock and control the ignition of the vehicle using the manufacturer’s app. It’s great for me during winters when my car is parked in an open parking lot and covered with frost or snow. I can simply switch on the ignition 15 mins before I am due to arrive and the car is defrosted and ready for me to drive away. It’s a luxury alright! But think about more important benefits such as vehicle security. I can easily monitor my car through the app to see if it is secure or track it if my car gets stolen.
Hopefully, we have successfully established my point about the value of data and connected vehicle technologies, which is going to drive the future of the automobile industry. But what about its adoption across the car rental industry?
While the automobile industry may have taken off on using Internet of Things (IoT) technology to improve the performance of cars, the car rental industry is yet to catch up. We spoke to a fairly large number of large rental companies recently to understand how they are using telematics, only to find out that 100% of them use it merely track their vehicles. That is equivalent to human beings using only 10% of our brains. What a waste of good intelligence (literally!).
1. Fleet tracking and live updates – This is the baseline of telematics capabilities and while most devices will give you this feature, the trick is to use the data more effectively for fleet management and increased utilisation. Coastr’s car rental management platform is an example of how we will be enabling booking management and automated scheduling of vehicles by leveraging the tracking data from cars and using it to create alerts that customers and staff members value the most. We anticipate that through the automated scheduling capability, car rental companies will be able to increase their fleet utilisation by at least 10-15%.
2. Fuel management – This is a major issue for many fleet managers and car rental companies as loss of fuel equates to higher operational cost. Telematics can unlock the data that can help to better manage fuel and fleet mix. As an example, one of the telematics companies Masternaut, has published an interesting article on how the telematics data can be used to track fuel efficiency in cars and determine the type of vehicles to buy in order to reduce fuel costs. A car rental company can pass these benefits to their customers who will incur less fuel costs in renting, while keeping the environment cleaner. A win win for everyone!
3. Predictive maintenance and vehicle health monitoring – The airlines sector is one of the best in using predictive maintenance as a way to identify issues in aircrafts that requires frequent maintenance to avoid unforeseen issues. The same can be applied to cars as telematics devices have become smarter in reporting vehicle health and diagnostics data in real-time that can predict when a vehicle may need maintenance. TomTom has written a great article on this topic.
4. Driving performance monitoring – There is an ongoing debate in the car rental industry about reducing CO2 emissions from vehicles and controlling driving behaviour is a key element of this problem. Telematics can help in addressing poor and rash driving behaviour by generating real time and in-cab feedback to drivers to improve their driving behaviour, thereby reducing CO2 emissions. Coming back to my Jaguar XF example again, when I am driving in my eco-mode every time I hit the accelerator a bit harder than usual, I get an instant amber colour on my dashboard to indicate that I am making a poor choice. If you want to read more on this, you can read this article by an independent consultant.
5. Dynamic pricing – Car rental companies have to invariably spend a lot of time planning and organising their fleet to get the maximum revenue out of them. Telematics data can be hugely beneficial in dynamic pricing while creating a really unique customer experience. As an example, customers renting out a car on limited mileage often complain about extra charges. Using telematics data, car rentals can now alert the customer when they cross the mileage restriction and automatically notify them of the extra charges they would be charged, without waiting for it to appear in the final bill or invoice. This can help create a very transparent and trusted experience to increase customer retention.
So, here is the deal. If you work at a car rental company or are the owner of one, please read up on the benefits of telematics and come talk to the team @Coastr because our car rental management platform is pre-configured with telematics to enable a fully integrated one-stop shop experience for businesses like you.
FAQs
How can a car rental business improve performance and profitability?
The most effective way to improve performance is to use the data already available across the operation. Connected vehicle technology unlocks fleet utilisation, fuel efficiency, predictive maintenance, driver behaviour monitoring and dynamic pricing. Combined with strong booking management, customer verification and clear reporting, these tools consistently raise utilisation, lower operating costs and improve customer experience without requiring fleet expansion.
What is connected vehicle technology in car rental?
Connected vehicle technology refers to the integration of telematics sensors, GPS tracking, vehicle health diagnostics and real-time data feeds with rental management software. It allows operators to see vehicle location, condition and usage in real time, control vehicles remotely through features like immobilisation and keyless entry, and turn raw vehicle data into operational decisions that improve utilisation, security and profitability.
What is telematics and how does it help rental businesses?
Telematics is the use of vehicle-installed devices to collect and transmit data about a vehicle's location, mileage, fuel consumption, driver behaviour and mechanical condition. For rental businesses, telematics enables real-time tracking, theft recovery, automated maintenance scheduling, accurate billing for mileage and fuel, and live insight into how each vehicle is being used. It transforms fleet operations from reactive to data-driven.
How does telematics improve fleet utilisation?
Telematics improves utilisation by giving operators a live view of every vehicle's status, location and availability. Scheduling moves from reactive to proactive, idle vehicles are identified immediately, gaps between hires are closed faster and double-bookings are prevented. Rental operators using telematics-driven scheduling consistently see utilisation rates improve by 10 to 20%, often without adding any new vehicles to the fleet.
Can telematics reduce fuel costs in a rental business?
Yes. Telematics data shows how each vehicle is being driven, including harsh acceleration, idling time, speeding and inefficient routing. Operators can use this data to identify high-cost driving patterns, encourage better fuel economy through customer feedback, optimise vehicle mix based on fuel performance and reduce unnecessary mileage. Even modest improvements in driving behaviour compound into meaningful fuel savings across a fleet.
What is predictive maintenance in fleet management?
Predictive maintenance uses real-time vehicle health data, mileage and historical service patterns to identify likely issues before they cause a breakdown. Instead of waiting for a vehicle to fail, the system flags components showing early signs of wear, allowing maintenance to be scheduled around rental commitments. This reduces unplanned downtime, lowers repair costs and extends vehicle life across the fleet.
How does telematics support dynamic pricing in car rental?
Telematics provides real-time data on vehicle availability, location and demand patterns that feed directly into dynamic pricing decisions. Operators can adjust rental rates based on which vehicles are returning to the fleet, which categories are running low, and where demand is peaking. Telematics also enables transparent mileage-based pricing, with automated alerts to customers when they approach mileage limits, avoiding billing disputes at return.
Is telematics worth the investment for small rental businesses?
Yes. Modern telematics has shifted from being a large enterprise investment to a manageable per-vehicle subscription, often delivering an average return of around US$25 per vehicle per month through improved utilisation, fuel recovery and reduced downtime. For small rental businesses, the security benefits alone, including theft prevention and remote immobilisation, typically justify the cost within the first twelve months.
