A Brief History of OBD II
Since 1996 in the USA and a bit later in Europe all cars have been equipped with a computer connector that allows anyone with the correct equipment to read data from the car. This software is OBD II.
OBD II emerged from two previous developments: embedded computers in cars and LA Smog.
What are On-Board Diagnostics?
Beginning in the 1960’s and 1970’s, car companies were developing small computers to help them control different parts of the vehicle. Initially, these on-board computers were very simple devices that would blink a light on the dashboard if they detected an engine problem.
By the 1990’s most cars contained a number of embedded computers controlling the engine, as well as the door locks, seat adjustment and other systems. These computers are called electronic control units – ECUs – and in addition to controlling parts of the car they can also record and diagnose problems. This is On-Board Diagnostics or OBD.
CARB
California, particularly Los Angeles, has been combating smog due to vehicle emissions since the 1940’s. California was the first place in the world to enforce emissions testing for cars, but, smog has continued to be a problem.

By the 1990’s American government agencies including the California Air Resources Board – or CARB – decided to make use of OBD technology to encourage cleaner air. The idea was to create a universal diagnostic standard that would allow car owners to:
- determine if their engine was polluting the environment, and
- shop around between garages to fix the problem quickly and cheaply without having to take their car back to the dealership for a fix
This was OBD II.
OBD II Standard
The OBD II standard says that all cars must have the same connector and that the connector must be in the passenger compartment near the steering wheel. All cars must communicate over their connector in the same language. Whereas previously, only a Ford dealer could do diagnostics on a Ford car, now a Ford and a Mazda and a Renault all had to respond in the same way.
OBD II also dictates that cars must support standard Diagnostic Trouble Code or DTCs. These are codes stored by the engine computer when there is a fault in the engine. If the Check Engine lamp in your car is on, that means that a DTC has been stored.
Finally OBD II lists a standard set of OBD II Parameters that you can read on any car. These parameters include Vehicle Speed and RPM.
OBD II Connector
There are a number of places that you may find the OBD II connector on your car. Most often it is under the dashboard by the steering wheel as you can see in the photo below.

Other places that you may find the connector are behind the ashtray in front of the gear shift, or near the handbrake. In some cars you need to remove a panel to access the connector but it is supposed to be in a convenient easily accessible location.
OBD II DTCs
Once you find the connector you can plug in to your car and read any Diagnostic Trouble Codes. Diagnostic Trouble Codes are numbered codes stored in your engine when there is a problem. Below is an example of a code that will turn on your Check Engine Light.

This code means that a small fuel leak has been detected. As an OBD II code this is valid on all makes and models of car and is often caused by a loose gas cap. There are thousands of universal Diagnostic Trouble Codes that cover the engine, body, network and chassis.
OBD II Parameters
While you are still plugged in, you may also read some parameters, such as:
- Vehicle Speed
- RPM
- Fuel Level
- Accelerator Position
- VIN – Vehicle Identification Number (unique to every car)
- How long the engine has been running
Among others. Many of these parameters can be read on the car dashboard but having an electronic log is very useful.
Who uses OBD II?
In the beginning only automotive repair tools used OBD II. Big car companies worried that they would lose money as customers would opt for cheaper independent garages rather having their cars fixed at dealerships. However, people soon realized that the potential in OBD II was not in diagnostic equipment to use in the garage, but in the fact that there was a universal method to talk to any car.
Fleet Tracking
The first groups to start to realize this potential were Fleet Tracking companies. Initially, most vehicle tracking devices were exclusively GPS based. Enhancing GPS based equipment with OBD II allowed Fleet Trackers access to previously unavailable data such as vehicle idling times. For example, the American delivery service UPS added OBD II to their fleet tracking and found that driver idling time cost them almost $200 per driver per year.
In addition to saving money on fuel costs, using OBD II you can be immediately notified if a vehicle has an engine DTC. UPS found that by using remote diagnostics it was to save thousands of dollars per truck.
Remote Diagnostics
As I said OBD II Diagnostics didn’t turn out to be the threat that car companies anticipated. However, there are still companies making use of OBD II for diagnostics products. OBD II is used for after-market tools for garages, and smaller hand-held devices for hobbyists. It is also used for remote diagnostics applications that can be used to actually help car dealers bring business back to them by diagnosing problems and contacting the customer from afar.
Apps
Compared to diagnostics, however, a far larger section of the current telematics market deals with Smart-phone linked devices. These systems have two part systems and include an OBD II “dongle”, attached to the car that connects to a Smart-phone over Bluetooth. The Smart-phone contains an app that can do any number of things. Current popular Smart-phone linked applications include:
- A method to block mobile phone calls when driving
- Dashboard applications that monitor and rate your driving behaviour and fuel usage
- Applications that track teenage drivers
- Applications that combine dashboard with GPS and upload your location to facebook
- Emergency call
Insurance
A final and very promising sector that uses OBD II is Usage-Based Insurance. Usage-Based Insurance is also known as Pay as you Drive (PAYD) and Pay How you Drive (PHYD). Clients agree to have a telematics device in their car monitoring driving including Hours driven, Distance driven, Hard braking.
This is a brilliant product because it appeals to the feeling that most people have which is that they are good drivers but everyone else is awful. UBI gives you a chance to prove that you are a good safe driver and as a reward, save money.
The Future of Telematics
So what does the future hold for the Telematics market?
In the short term usage based insurance seems a sure winner. ABI research group predicts that there will be at least 100 million UBI users by 2020.
Smart-phone linked devices will continue to find clever applications for OBD II data but what will prompt a big consumer take-off is unclear. An emergency call function which will call for help if you have a crash seems a winning feature.
Infotainment services could also work, paying for themselves through advertising. For instance, your Smart-phone could tell you:
“You’ve been driving for 3 hours, you must be hungry, why not stop for a delicious steak at Bob’s Steakhouse, next exit, on your right”.
In the long term, it seems certain that car manufacturers will start offering their own telematics platforms.
Finally, it seems certain that there will be a new, open standard to enhance or replace OBD II. If some of the predicted future of driving, things like highways where your car drives itself, are to come to pass, there will need to be a universal standard that will let all makes and model of car connect with all other make and model of car and also to the environment. However, at the moment the only universal gateway to every car is OBD II.


