Researching Your Existing Telematics Contracts

Once you decide to break free from your existing telematics contracts, you should take a few steps to ensure that you are able to move to a different company with minimal fallout. Note that telematics contracts typically obligate you to paying the full amount of the remaining months of the contract term, even if you leave the contract early. Therefore, it is important to properly plan the exit due to the potentially high costs involved.

Here are a few issues that you should consider when considering ending your service with your current provider.

1. Auto renewals

Just as the name implies, many telematics contracts auto renew after the initial contract term ends. Auto-renewals aren’t necessarily bad if you have a good provider because they provide you with protection from automatic price increases. However, if you are unhappy with your current provider, auto-renewals will force you to stay with that company longer than you would like to. Most auto-renewals are limited to 1 year after the contract term, but some unscrupulous providers may include language that force you into an automatic renewal for 3 to 5 years after the initial contract expires. You can always opt out of auto-renewals by providing notice within 60 to 90 days of the end of the original contract term. It is generally best to opt out so you have flexibility to part ways after the initial contract ends. If you are stuck in an auto-renewed contract, there may be some hope. Some states have strict requirements as to the legality of auto-renewal clauses and the notices that your provider must send before the auto-renewal starts. If they don’t meet these requirements, then the auto-renewal could be disqualified. Review this site to see what the auto-renewal requirements are for your state.

2. Rolling telematics contracts

Telematics contracts are often established for each individual unit, much like they do for cellular phones. Therefore, you could be in a position where your devices exit the contracts at different times. Most companies purchase this technology with a large initial purchase for most of the fleet, then smaller purchases as vehicles are added to their fleet. If you are switching providers, you should time your exit when the bulk of your units exit the contract period and work with the new provider to determine if there are any incentives to reduce the expense of exiting the remaining contracts early. There are a few fleet telematics companies that buy out contracts, including FieldLogix.

3. Vendor cooperation

When most companies decide to leave a provider, they typically attempt to reach out to the existing provider to determine how much time is left on the existing contracts. Some providers tend to become very uncooperative at this point. They may become unresponsive, or may drag their feet for weeks or even months in providing you with the information that you need. There are three tactics that tend to work best when in this situation.

A. You can always search your files for the contracts if they are readily accessible.

B. Tell your provider that you are currently gathering all of your vendor contracts to prepare for potential changes within your company.

C. You can simply inform your provider that you want to cancel the service. That action alone will often generate a very quick response. They will attempt to dissuade you by informing you of your remaining contract term and your financial obligation. This will get you the information that you need, including the remaining contract term and the cost to exit their services.

If you are unhappy with your provider, you should have the right to exit their contracts, especially if you have made several attempts to resolve any outstanding issues to no avail. If you determine that it is time to move on, following the above steps should help you end your relationship with minimal hassles.