Lease-On vs. Your Own Authority: Which Pays More?

Every owner-operator with their own truck eventually faces this choice: lease on to an established carrier, or get your own operating authority and run independently. Both paths can generate good income. Both have real downsides. The difference is in how much administrative burden you carry, how much risk sits on your plate, and how much of the revenue dollar you actually keep.

There is no universally correct answer. What there is, is a clear-eyed comparison — and the right answer depends on where you are in your career.

How Lease-On Works

When you lease on to a carrier, you operate your truck under that carrier's USDOT authority (in the USA) or CVOR and carrier registration (in Canada). You sign a lease agreement with the carrier. You drive their loads, follow their dispatch, and haul under their insurance and operating number. You own your truck; they own the authority.

Compensation structures vary. Some carriers pay a percentage of the load — typically 65–80% of the line haul rate. Others pay a flat rate per mile. Some offer fuel surcharge pass-through; others bundle it into the rate. The carrier handles billing, collecting from shippers, and most of the compliance paperwork. You show up, drive, and invoice the carrier.

Common lease-on arrangements include dedicated contract carriers, large spot-market fleets, and specialty operators in refrigerated or flatbed freight. Names like Challenger, Bison, or Trimac in Canada operate large lease-on programs. In the USA, carriers like Landstar operate almost entirely on an agent-and-lease model.

How Own Authority Works

Running your own authority means you hold your own MC number (FMCSA, USA) or your own carrier registration and CVOR (Canada), your own insurance policy naming your company as the insured motor carrier, and your own broker relationships. You book loads directly — through load boards like DAT or Truckstop, through a freight dispatcher, or through direct shipper contracts you've developed.

The entire load dollar flows through you first. You pay your expenses from it. You keep what remains. You also carry all the regulatory, financial, and operational risk yourself.

Pay Comparison: Lease-On vs. Own Authority

On the surface, own authority looks more lucrative because you capture the full broker load rate. But the comparison requires accounting for what the carrier provides under a lease-on arrangement.

Under lease-on at 70% of line haul: A $3,000 load pays you $2,100. The carrier keeps $900, but they also carry your primary liability insurance, handle all broker credit and payment, manage compliance, and often provide a fuel card with discounts. Your net cost per mile is lower because you're not paying $14,000–$18,000/year in primary liability.

Under own authority on the same $3,000 load: You collect the full $3,000. But you pay 3–5% to a factoring company ($90–$150), your dispatcher's 7% fee ($210), your pro-rated insurance cost, and every other operating expense directly. Your gross on that load might be $2,750 after factoring — but your annual insurance overhead of $15,000–$20,000 must be recovered across every single load.

For high-mileage operators running 110,000+ miles per year, own authority typically nets more — often $15,000–$30,000 more annually once established. For operators doing 70,000–85,000 miles per year (part-time, medical restrictions, or family balance), the insurance cost makes the math much tighter. Lease-on may actually net more in those scenarios.

Insurance: The Biggest Structural Difference

Primary liability insurance under your own authority costs $12,000–$20,000 CAD/year for a new carrier. Under lease-on, the carrier's policy covers you while under dispatch — you may only need non-trucking liability ($400–$700/year) and physical damage on your truck.

That $12,000–$18,000 insurance gap is real money. It takes consistent high-revenue months to overcome it with own-authority gross rates. In year one, many new own-authority operators are surprised to find their net income is similar to — or even lower than — what they could have made leasing on, once the insurance and compliance infrastructure costs are absorbed.

Paperwork and Compliance Burden

Lease-on is significantly simpler administratively. The carrier handles IFTA filings, broker packet setup, credit checks on brokers, and Certificate of Insurance distribution. You maintain your driver qualification file and ELD records. That's roughly 80% of the administrative work handled for you.

Own authority requires you (or someone on your behalf) to handle all of it: quarterly IFTA filings across every jurisdiction you operated in, IRP plate renewals, broker packet submissions for every new broker relationship, insurance certificate management, DOT drug consortium enrollment, and FMCSA portal updates. First-year own-authority operators routinely underestimate this workload. Many spend 5–10 hours per week on compliance in year one.

The Dispatcher's Role Under Own Authority

A freight dispatcher becomes your most important relationship when running own authority. A good dispatcher finds loads on DAT, negotiates rates, submits your company's broker packets, chases detention claims, and keeps your truck moving. They don't provide insurance or handle IFTA — but they handle the daily grind of load board work that consumes hours if you try to do it yourself while also driving.

Dispatcher fees typically run 5–10% of gross revenue. That cost is real, but it's offset by better rates (experienced dispatchers negotiate more aggressively than new operators do alone), fewer empty miles, and the time you get back to focus on driving and maintenance instead of staring at a load board from a truck stop at midnight.

Under lease-on, dispatch is provided by the carrier. The tradeoff is that you have less control over which loads you run and which lanes you work.

Freedom and Control

Own authority gives you the ability to refuse any load, pick your lanes, set your own schedule, and build broker relationships that can eventually lead to direct shipper contracts. You can choose to haul only in specific regions, take weeks off without impacting a carrier's fleet utilization metrics, and negotiate rates based on market conditions rather than a fleet pay scale.

Lease-on offers predictability. Many lease-on operators have consistent freight in their home region, guaranteed minimum miles in some programs, and far less uncertainty about what they'll earn in a given week. For operators who value schedule reliability over income ceiling, lease-on is often the right fit.

When Each Makes Sense

• Choose lease-on if: You're new to owning a truck, you want to learn the business before taking on full compliance responsibility, you run fewer than 90,000 miles per year, or you prioritize simplicity and predictability over income ceiling.
• Choose own authority if: You have 2+ years of commercial driving experience, you're running 100,000+ miles per year consistently, you have an operating cash reserve to absorb startup costs and insurance, and you're willing to invest in a dispatcher relationship.

Many successful operators start on lease-on, build their skills and savings for 18–24 months, then transition to own authority with a financial runway and operational knowledge that dramatically improves their odds of success. That staged approach is usually smarter than jumping straight to own authority from a company driver seat.

Looking for a dispatch partner that handles the load board, broker setups, and paperwork? Get dispatched with TRUCC — we work with owner-operators and small carriers across Canada and the USA.