Is it better to buy or rent a GPS tracker for car?
You are decided to invest in a GPS tracking system for your fleet of vehicles or your car? Then you are probably asking yourself the question: is it better to buy GPS trackers or to rent them?
In the series of articles about the cost of GPS trackers for car, this page helps you to answer the question: buy or rent?
The choice depends on your needs and your financial ability to invest.
We detail the advantages of each option, with an example at the end of the article. You will then be able to determine which is the most judicious or profitable way for you or your company.
Buy car GPS tracker
You are probably asking yourself the question: is it profitable to install GPS trackers on company vehicles? Overall, buying is the most advantageous business model in the medium term. Find out more in this chapter.
The principle is simple:
- You buy the GPS trackers.
- At the same time, you take out a subscription for several months or several years with the same supplier. In some offers, this subscription is directly included in the purchase price of the trackers.
- When you reach the end of the subscription period (usually 1, 2 or 3 years depending on the purchase option), you have the choice to renew the subscription or not.
- In any case, the GPS trackers are yours. If you renew the subscriptions, you will only pay the subscription part, of course.
In the case of a tracker without SIM card or without subscription, the steps may differ. However, if your need is really to track a car or a vehicle, the principle of this comparison is correct. In addition, you can find more information on GPS trackers without subscription, without SIM card or with SIM card in a related article.
Example of purchase price
Let’s take an example, with the assumption that costs are in the average of the market.
You buy a car GPS tracker with GSM technology, for a total amount of 194€, all included. This price is broken down as follows:
110€ : the GPS tracker to plug in your car
84€ : the subscription for 1 year of service (SIM card, GSM network connectivity, access to the tracking application).
In general, everything is initially configured for the simplest possible installation. That is to say, you will certainly only have to place the GPS tracker in the car, then you will have to add it to your account in the application.
After 1 year of use, the service will stop. You will then have the choice to extend it or not. If you decide to renew the subscription, you will only have to pay 84€ for 1 more year of service.
This example is based on a 1 year subscription, but it can be different depending on the provider and the option chosen. Also, the renewal can be tacit from year to year without any intervention from your side.
As you can see, the main advantage of this model is that after an initial investment, you will only have to pay the subscription for the geolocation service.
It is quite common that companies with a strong need for a geolocation system invest via this purchase mode, because it is cheaper in the medium term, or even much cheaper in the long term.
To further reduce the bill, it is common to buy several years of subscription from the start to benefit from significant discounts linked to the commitment.
Finally, this method of purchase still has an advantage related to price inflation over the coming years. The current economic situation suggests that prices could rise sharply in the months and years to come. We are currently seeing a 10% increase every six months. Buying a GPS tracker now, means securing its purchase price for several years of use. All that remains is to find out which GPS tracker is best suited to your needs, the one that offers the best quality/price ratio or the cheapest GPS tracker for cars.
Rent car GPS trackers
Renting GPS trackers for its fleet of vehicles is quite common in companies. It allows certain short-term facilities.
The procedure is as follows:
- You sign a rental contract with the supplier, based on a commitment period (no commitment or 1 year or 2 years…).
- You pay the file fees / startup (these fees are very different according to the suppliers).
- You receive a GPS tracker ready to install in your car or fleet of vehicles, and ready to be used.
- Then you are charged a fixed amount per GPS tracker every month in a transparent way.
- You can stop the subscription if you want only after the commitment period has passed
- If you return a GPS tracker, you must send it back in the same condition it was sent. If it is damaged, you will have to pay a charge corresponding to the price of the tracker.
Example of rental prices
This time again, we will take an assumption of average costs available on the market.
You rent a car GPS tracker with GSM technology with a 1 year commitment. You will pay for example the following amounts:
50€ : starting bonus for the setting up of the contract
15€/month : all-inclusive subscription for the rental of the tracker, the connectivity and the platform.
In this example, you can’t stop this subscription for 1 year, since the price you got was conditional on you committing for 1 year.
Again, in general, the trackers are set up for very simple installation. Some providers offer an installation service through a partner installer near you. This may be relevant if you have a large fleet, but it will come at a cost.
After 1 year of use in this example, the service will be extended in a transparent way for you. You can of course request a termination of the service, but remember to do so in advance as any year or month started is due.
The service of renting GPS trackers for vehicles instead of buying them is quite practical if you don’t want to commit yourself at first. This mode is advantageous if :
- you have a punctual need for tracking
- you don’t know yet if the tracking service will be useful to you
- you want to test the supplier or the material before committing yourself.
Another essential argument is the initial cost for the acquisition of the GPS trackers which may seem out of your budget, especially when your need is not consolidated.
Obviously, this comfort has a price. After a certain period of time, it will cost you more, even much more, to continue renting than to buy. The following chapter compares the total prices so that you can make up your mind.
Comparative figures between buying and renting
Let’s go back to our examples detailed in the previous chapters, over 1 year, 2 years and 3 years of use.
|For 1 GPS tracker||After 6 months||After 1 year||After 2 years||After 3 years||After 5 years|
|Total cost Purchase||152 €||194 €||278 €||362 €||530 €|
|Total rental cost||140 €||230 €||410 €||590 €||950 €|
|Is buying more interesting than renting?||no||yes||yes||yes||yes|
|Loss 12€/tracker or 9%||Gain 36€/tracker or 16%||Gain 132€/tracker or 32%||Gain 228€/tracker or 39%||Gain 420€/tracker or 44%|
The best solution for you or your company
As you can see on our comparison, buying a geolocation solution is much cheaper than renting one. However, it is necessary to be careful and to know the steps and pitfalls to avoid when buying GPS trackers for a fleet of vehicles.
If your need is mature and you have the necessary cash flow according to the number of plotters, don’t hesitate, buying is the right solution.
If you are not sure about the technology, the supplier or your needs, or if you do not want to commit yourself for more than 6 months, then leasing is a good option.
Many vendors offer both solutions depending on the customer’s needs. Do not hesitate to ask them if they offer both solutions, they will guide you.
There are many other criteria that can come into play and only you can judge which solution is best. For example, ask your insurance company if it is possible to get discounts depending on the criteria of the chosen GPS tracker for cars. Nevertheless, we hope this article will help you in your choice.