There are two types of Tracking Systems

1. Active Tracking (Live Tracking): Here the user can track the vehicle’s current location, speed, routes taken etc live using a Web Application.
2. Passive Tracking: Here the GPS Tracking Device stores the vehicle’s location, routes taken, speed and other details and once the vehicle arrives at a pre-determined destination, the device is removed and details are downloaded to a computer for evaluation.

Real Time GPS Vehicle Tracking Systems (Live Tracking) consist three parts:

1. GPS Tracking Unit: A GPS Tracking unit is a device that is fit to a vehicle. It captures time and location details from the GPS satellites and stores it in the cache memory along with speed, fuel, temperature and other details. These are then sent to the GPS Server via cellular (using GPRS) or satellite networks.

2. GPS Server: A GPS Tracking Server is an Internet Server. It has two responsibilities, 1. receive data from the gps tracking unit and store it to the data base, and 2. send this data to the user interface via the Internet as requested by the user.

3. User Interface: The user interface is the Computer Application which display’s the vehicle details like location, fuel, routes travelled and reports etc to the user (i.e. the fleet manager). It allows real time tracking of one or more vehicles displaying the vehicle’s current location and routes taken on an online Map eg. Google, Bing etc.

Additionaly, fleet managers can also specify Geo-Fences: virtual boundaries. These can be specified for the vehicles and in the event that these boundaries are crossed by the vehicle, an alert is sent (in the form of emails or sms) to the fleet manager.
SOS buttons are provided to be used in case of an emergency to send alerts. Such systems may also be equipped with a camera to connect to the SOS button, handset phone to communicate with the manager and LCD to display incoming messages.

Source: Wikipedia