GPS tracking uses a network of satellites to determine the location of a device that was specifically designed for that purpose. The basic idea is that a GPS tracker uses a process called trilateration to determine its physical location based on its distance from three GPS satellites. This is the exact same technology used by your portable or in-car navigation system.
The difference between a GPS tracker and a car navigation system is that the navigation system provides you with your location and driving directions, while a tracker either keeps a record of your driving habits or broadcasts its location in real time.
When a GPS tracker for a car is capable of broadcasting its location, it typically uses the exact same technology that your cell phone does to make calls or connect to the internet. This is why some GPS car trackers require a monthly subscription fee.