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GPS newbie here.

Looking at this product: http://dx.com/p/gps-gsm-gprs-tracker-for-personal-remote-positioning-29284

How does a GPS tracker work without a monthly plan?

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Did the simple lack of information on the website lead you to that conclusion? To me, GSM indicates cellular service is required. I would also check with your state and local laws to determine whether such a device is legal. – blah238 Nov 18 '12 at 6:30
    
@blah238: Actually I was lead to that conclusion based on a user review (from Brazil) and their comment "Recommend it to all who want to see free of monthly plans." – Greg McNulty Nov 20 '12 at 3:10
    
From the same comment "And the best fast, just have credit in the chip." That sounds like he was using a prepaid SIM card. – blah238 Nov 20 '12 at 3:35

Just to determine its own location, the tracker would not need a plan: GPS is free of charge (all it takes is a working receiver, much like a radio). Without GPS reception (e.g. in urban canyons, tunnels, garages) the device likely falls back to GSM to establish its position. That will also work without a plan (or even without a SIM) – the device will still "see" nearby cell towers, it just won't be able to register with the network unless it has a valid SIM.

But eventually the tracker needs to receive requests for its present location and report back, which requires two-way connectivity. I know of no carrier that offers this for free, thus you would either need a monthly plan or a prepaid plan. In the latter case, you do not pay a monthly fee but you do have to top up regularly (amounts and intervals vary from carrier to carrier) to prevent your number from expiring, thus there is a periodic fee involved one way or the other.

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