Lease-on programs look attractive on paper — no authority needed, loads ready immediately, fuel discounts. The reality is more complicated, and the hidden costs often erase what seemed like an advantage.
What lease-on programs actually are
Lease-on (also called lease-to, carrier lease, or carrier lease agreement) means you operate your truck under a motor carrier's authority rather than your own. You lease your truck and driving services to the carrier; they dispatch you on their loads and handle billing.
This is different from a truck lease (where you are financing a truck purchase through payments) and different from a lease purchase (where payments eventually give you ownership). Lease-on is specifically about operating authority — you keep your truck, they provide the operating paper.
The genuine advantages
- No authority needed: Skip the FMCSA registration process entirely — no waiting, no BOC-3, no insurance filing
- Immediate loads: Established carriers have broker relationships and shipper accounts already in place
- Fuel card programs: Large carriers negotiate 15–40 cents per gallon discounts through volume programs
- Load planning support: Dispatch is often included or low-cost
- Lower insurance (sometimes): Operating under the carrier's authority may reduce your insurance cost
The hidden costs that change the math
The single biggest thing to understand: Under most lease-on agreements, you are an independent contractor but operating under someone else's authority. Their compliance failures, safety scores, and operating restrictions become your operational constraints.
Percentage of gross
Most carriers take 12%–25% of gross revenue in exchange for providing the authority and dispatch. On a $2.50/mile load over 500 miles ($1,250 gross), that is $150–$312.50 off the top before fuel, insurance, or truck payments.
Fuel surcharge capture
Many lease-on carriers keep the full fuel surcharge from the broker and pass back a calculated fuel discount instead. Read exactly how fuel surcharge is handled — it is often the largest hidden margin extraction.
Forced dispatch clauses
Some lease-on agreements have minimum mileage requirements or forced dispatch clauses — if you refuse loads you may face penalties or termination. Read the refusal rate policy carefully.
Equipment requirements
Carriers can impose equipment standards — mandatory APUs, trailer restrictions, age limits on your truck — that may require costly upgrades or limit your hauling options.
When lease-on makes sense
Lease-on is genuinely smart when you are brand new to trucking, need time to build credit and operating history before getting your own authority, want to learn the business without the full administrative burden, or plan to get your own authority within 12–18 months and are using lease-on as a bridge.
When to get your own authority instead
If you have 12+ months of operating history, a consistent customer base or broker relationships, and the ability to manage basic compliance — your own authority almost always generates more per-mile revenue. The 12–25% you pay the carrier funds your dispatch, insurance markup, and their profit margin. Own authority eliminates the carrier margin entirely.