Leasing Onto an MC: What You Should Know Before Operating Under Another Carrier’s Authority
So like, in the trucking industry, anything that you do is going to impact your cash flow – whether it’s the loads that you’re pulling or the authority that you’re utilising and that’s a big deal at the end of the day.
Honestly most of us are wondering the same thing: should I rent somebody else’s MC permission or buy a permission myself? It is a question that always hangs in the air around every chat group, around every coffee shop get-together.
Dexter Dispatch Services not only manages guys who lease but also those who drive under their own. They have experienced the rewards and the traps of each path – profit, freedom, compliance. Essentially, this post is going to be the pros and cons in detail, along with some good facts and figures to help you make up your mind about your next step in trucking.
What Does Leasing Onto an MC Mean?
Thus, if another person leases on to your MC, it is essentially as if they are operating under your motor carrier authority rather than their own authority. Basically, you are entering into a contract with an already FMCSA-permitted carrier to haul goods.
Typically, you will remain as an independent contractor while using the carrier’s DOT and MC numbers. However, trucking companies let you keep the truck and sometimes let you choose your own routes. This allows you to devote your time to driving on the road and making money without worrying about compliance, insurance, and such paperwork, with the carrier handling it all for you.
How Operating Authority Works
If you’re doing business as a truck driver driving from state to state, you need to get an MC number from the FMCSA.
As an ILC if you have your own authority then you are recognized as a legal carrier who is responsible for:
- parties and contract including brokers
- Keeping insurance up to date
- Passing safety checks
- Filing those IFTA/ UCR taxes
- Communication about prices and invoicing
If you lease to another MC, then the carrier can substitute organization for you. Basically they insure your vehicle under their license, allow you to drive, but slice off a portion of your money.
Why Some Drivers Choose to Lease Instead of Getting Authority
Yo, if you ain’t no trucking veteran- if you’re a newbie owner, or you’re running a tiny axlemaker of a fleet- leasing is the way to go. It’s much faster, less expensive and less risky than starting right from scratch. But, if you do it all yourself, this is what you have to deal with:
- Harsh insurance costs (particularly for new entrants)
- Time consuming registration and compliance processes
- Financial responsibility of everything from load booking to safety audits
When you lease to an MC, you throw away much of those headaches. The main carrier already have insurance brokers systems – so you just hop up, deliver and collect your cut.
For a lot of the drivers, it’s the perfect way to pick up some experience, stuff some cash in your pocket, and educate yourself on the biz, before you drive solo.
Types of Lease Agreements
When you’re looking to lease on to an MC you’ll usually come across two pretty classic types of deals:
1. Lease-Purchase Agreement
This one basically allows renting the truck and the authority of the carrier. You continue making payments on the purchase of the truck while you work under the carrier’s DOT At the end of the lease, the truck is actually your own – no excuses for that future.
2. Lease-On Agreement
In this case, you already own the truck, but you’re utilizing the authority, insurance and permits of the carrier. You end up getting a chunk of the load revenue – typically around 75 – 85% of the gross rate – and the carrier gets the rest and pays the rest of the expenses.
Both setups have their ups and downs but either way, you need to be thorough in reading the details of the contract. The Dexter Dispatch crew always tells drivers to double check lease terms to make sure all’s fair and transparent.
Benefits of Leasing Onto an MC
Leasing should be a smart choice for many of us who are driving students. Here’s why:
1. Reduced Startup Costs
The cost of getting your own authority may well be thousands in the way of insurance and registration. Leasing allows us to start earning fast without the upfront financial cost.
2. Simplified Compliance
The carrier handles FMCSA reporting, safety audits and all those administrative functions to remove the burden so that we don’t have to lose sleep over the legal aspects of the business.
3. Access to Freight Networks
The broker and shipper contacts of the carrier are provided to leased drivers. We can ride the crested wave of steady loads and negotiate excellent rates.
4. Steady Cash Flow
Carriers do billing, collections, etc. so we get paid on time even when brokers are slow.
5. Less Paperwork
Eliminate the need for chasing load confirmations, file IFTA, and UCR registrations. The carrier handles it all.
Drawbacks of Leasing Onto an MC
While overhead leasing is not at all bad, it does have its disadvantages:
1. Reduced Independence
What you’re doing is you’re living by someone else’s rules. Basically, that means you aren’t able to choose what load to take for or what lane to drive, or set your own rates.
2. Revenue Sharing
A lot of the time the carrier takes a cut of what you get made usually 15% to 25% or even higher so you aren’t making the sticker price anyhow.
3. Limited Branding
Since you are using their DOT and MC number, your truck and the paperwork all appears to be displayed with the carrier as opposed to you. It can be difficult to build a personal brand.
4. Dependence on Carrier Reputation
If the safety scores on the carriers go down or they lose their way of operating, it damages your operation as well. What you get is whatever other problem they have.
5. Restrictions on Freight Choices
Some carriers will lock you into specific brokers which restricts the jobs you can obtain and cuts into your profitability.
Leasing Onto an MC vs. Getting Your Own Authority
| Aspect | Leasing Onto an MC | Having Your Own Authority |
|---|---|---|
| Startup Cost | Low | High (insurance, permits, setup) |
| Control Over Loads | Limited | Full |
| Paperwork & Compliance | Carrier handles | You handle |
| Profit Margin | Shared with carrier | 100% yours |
| Risk Level | Lower | Higher |
| Learning Curve | Easier | Steeper but more rewarding |
At Dexter Dispatch Services, we’ve seen drivers start under lease and eventually move to full authority after building stability. It’s often the best way to grow strategically.
Hidden Truths About Leasing Onto an MC
Leasing is more complicated than you might think. Here are some of the things that drivers realize with time:
1. You’re Still an Independent Contractor
You’re not an employee even though you’re under the authority of another carrier. You’re the one who pays for the fuel, maintenance and taxes and don’t forget that.
2. Insurance Coverage Can Be Limited
Cargo and liability are covered, however, down time and personal property is not. Always check what you are really getting.
3. Contracts Can Be Restrictive
Some carriers have non-compete clauses and could prevent you from working with other dispatchers or brokers. That’s a real deal.
4. Rate Transparency Varies
Not always the full load rate is visible. Again, this is why working with transparent companies like Dexter Dispatch is critical.
How Dexter Dispatch Services Helps Leased Drivers
Dexter Dispatch Services works with both independent carriers and leased-on drivers. If you’re operating under someone else’s authority, we can still help you maximize profit and minimize downtime.
Here’s how:
- We communicate directly with your carrier to manage loads efficiently.
- We find high-paying freight within your allowed network.
- We handle paperwork and rate confirmations on your behalf.
- We help you track miles, manage fuel, and stay compliant.
Even if you’re leased on, Dexter Dispatch helps you run like a pro and prepare for the day you’re ready to get your own authority.
Transitioning from Leasing to Your Own Authority
Once you’ve gained enough experience and financial stability, you might decide to operate independently. Here’s what you’ll need:
- Apply for your MC and USDOT number
- Purchase insurance (auto liability, cargo, general liability)
- File UCR and BOC-3
- Build relationships with brokers and shippers
- Partner with a dispatch service like Dexter Dispatch to keep your trucks moving
Starting your own authority takes effort — but it also gives you full control and higher profit potential.
Common Mistakes to Avoid When Leasing Onto a Carrier
- Not reading the contract thoroughly
- Ignoring fee deductions (some carriers deduct fuel, insurance, or trailer fees without notice)
- Failing to track miles and loads for tax purposes
- Relying solely on one dispatcher
- Not maintaining your own records for IFTA or tax filings
Dexter Dispatch always advises drivers to stay informed and proactive — even if someone else handles the paperwork.
Tips for Choosing the Right Carrier to Lease Onto
- Check FMCSA safety records
- Ask about payment schedules and deductions
- Understand dispatch control and freedom to choose loads
- Review contract exit terms carefully
- Look for carriers with a positive reputation among drivers
Choosing the right partner sets the tone for your success on the road.
Conclusion
Leasing onto an MC is actually a good plan to start a trucking business with as it minimizes stress and risk. However, you must know that you are entering into a partnership with obvious trade-offs: no autonomy, division of profit and limitation on contract.
With the right game plan and with Dexter Dispatch Services guiding you through the process, you’ll not only be able to maximize the benefits out of your leased equipment but also work toward going solo. Their dispatch agents work with both lease and independent drivers to connect them to lucrative loads, maintain tight schedules, and support the growth of their trucking business in a sustainable manner.