How to Become an Owner-Operator

Many drivers come to love the open road and decide that they want to take their truck-driving careers to the next level by becoming an owner-operator. An owner-operator is a driver who has purchased their own truck and gone into business for themselves instead of working for a trucking, shipping, or freight company. Owner-operators have more control over their work, their schedule, and their profits, by becoming independent and working for themselves.

Now is a great time to become an owner-operator. Across America, there are an average of 12 loads for every truck driver, creating high demand for reliable drivers, and allowing owner-operators to charge good rates and make good profits doing work they love. And technology has made it easier than ever for independent drivers to connect with loads; with agents, brokers, and companies using websites and mobile apps to connect with drivers, it’s even easier to find work that fits your equipment and your schedule.

Is being an owner operator right for you?

If you are considering becoming an owner-operator, there is more to it than just being a good driver. It’s not a good fit for everyone. Here are the skills you will need:

Organized and dependable

Being an owner-operator is being a small business owner. You will need to keep detailed and accurate financial records, be responsible for your schedule, and meet your deadlines. If these are things you struggle with, it may not be the right job for you.

Have a good driving record

Ideally, you would have 5+ years of experience as a truck driver, with a solid record of safety and reliability. Not only does that make agents more likely to trust you with their loads, it reduces your insurance rates.

Enjoy the work

It’s not enough to simply tolerate life as a truck driver; you need to truly enjoy it. Becoming an owner-operator is a huge investment of your time and money. If you don’t love the work, it’s not a good investment.

Good reputation and relationships

Word gets around in the trucking industry, and you will need a good reputation to successfully market yourself as an independent driver. Hopefully you have built good relationships along the way, to help you find new opportunities.

Good credit rating

Being an owner-operator is like owning any other small business – you will need credit, and you will need loans. Having a good credit rating reduces your interest rates when you finance a truck, when you use a credit card, or if you have to borrow in an emergency. Good credit lowers your cost of business.

Good health

When you go independent, you not only lose company-funded insurance, but if a health situation keeps you from driving, you lose your income. There are even health conditions that can cost you your license and keep you off the road altogether. Be honest about your health and determine what it will cost you to get health, disability, and life insurance out of your own pocket.

Pros and cons of being an owner-operator

If you have considered all of those factors, it’s good to weigh the pros and cons of being an owner-operator.


  • Owner-operators control their work, by choosing which loads they want to carry and where they want to drive
  • Owner-operators control their earnings, by setting their own rates and negotiating their own deals
  • Owner-operators control their own schedule, by deciding when they are and are not available to work. This ability to control your own schedule is often the most powerful factor for people in becoming owner-operators, as they are able to choose to be home for holidays, take vacations, or commit to a regular home schedule that increases work/life balance


  • Owner-operators have more personal responsibility. They have to create and maintain their own individual reputation, independent from a company, and assume all their own liability in the event of a problem
  • Owner-operators have to do bookkeeping and keep financial records for themselves and for the business. They also have to do financial planning, invoicing, bill paying, and marketing. Running a small independent business is more than just driving
  • Owner-operators have less of a safety net, not just for insurance, pension, or disability, but also if there is an accident, if your truck breaks down, or if a medical or family emergency keeps you off the road. And most of the various insurance premiums will be higher because independent operators don’t qualify for large group rates
  • Owner-operators are more vulnerable to market fluctuations. While the trucking industry looks to be strong for the coming decade, those projections may be incorrect. Markets may change, regulations may change, and technology may change, in ways that jeopardize your career. You may go into debt buying a truck, only to find out in a year or two that your routes are being taken over by self-driving vehicles. While that is unlikely given what we know right now, the truth is that running a small business is always a risk due to unforeseen factors. While the life of an owner-operator offers more day-to-day control of your work, you are also vulnerable to things that you simply can’t control.

Conduct research

If you’ve weighed the pros and cons and feel like being an owner-operator is right for you, it’s time to dig in and do some research.

Talk to other drivers

They can provide valuable insights into their experience.

Join a professional association

They are a great way to gain insight into industry trends.

Research your local laws

The more familiar you are with hours of service laws, weight laws, fuel tax laws, local business licensing requirements, and US DOT regulations, the better informed you will be about the true costs of being an owner-operator.

Review opportunities

Back in the day, a driver needed to know one or more agents in order to find work. Today, we have online load boards that make it simple to find loads and connect with jobs, delivered right to your phone. Check load boards and get an idea of how much work there is in your area, what your loads and routes might be, and what you can expect to earn.

Start pricing trucks

Keep in mind that reliability is the most important feature in your truck, rather than brand name. Start doing the math and figure out how much of a down payment you can afford, as well as calculating the cost per mile to operate a specific truck.

In a perfect world, you will find a dealer who used to be a trucker and who knows how to help you make the right choice. Buying a truck is a huge investment for an owner-operator, and the wrong decision can bankrupt you. If possible, talk with other owner-operators and ask for their insight and recommendations for dealers

Plan your costs

Start gathering information and estimating costs for permits, fees, insurances, licenses, maintenance, overhead, and so forth. Remember to plan for your personal and family insurances as well as business and operational insurances.

Make a business plan

At this point it can still be rough, but you should be putting together a budget and projections for your costs and your income. If you don’t know how to use spreadsheet software, learn it, so that you can change variables like fuel costs, truck payments, CPM, etc., and compare different outcomes over the course of a year or two. Plan for best- and worst-case scenarios.

What kind of carrier will you be?

The next most important consideration is whether you will become a common carrier or a contract carrier.

  • A common carrier is truly self-employed, owning their own truck and taking whatever loads they choose from any agent they choose
  • A contract carrier is self-employed, but generally operates under an exclusive contract with a specific company, and only carries those loads and drives those routes. Contract carriers are also called “leased carriers,” and these exclusive agreements have their upsides and downsides. Being a leased carrier is a good entry point into being an owner-operator for many drivers. It allows you to have some of the benefits of being an owner-operator, while mitigating some of the risks. Many drivers become contract carriers for a few years before going fully independent.

Being a contract carrier

Being a contract carrier allows drivers to benefit from regular, predictable work

The carrier keeps track of permits, plates, insurance, and other necessary paperwork. Although the driver generally has to pay for it, they don’t have to monitor, manage, or apply for those things, and often they get the benefit of lower premiums due to the carrier’s group rates. The same often applies to fuel costs, which can be purchased at the carrier’s group rate.

The carrier may reimburse you for some expenses, like toll fees

Keep in mind that, by taking yourself out of the competitive marketplace, you are essentially paying the carrier to find loads and do paperwork for you.

After a few years, most leased carriers find that their earnings plateau

They aren’t available for the competitive, more lucrative jobs, and the carrier isn’t as motivated to reward long service with bonuses, incentives, and profit-sharing that they would offer employees. But it is a great way to gain experience before going all-in as an owner-operator.

Be particularly wary of agreements with carriers that want to sell you a truck in return for an exclusive contract

Those rates are often much lower than you would get in any other agreement, and most experienced drivers would advise you against these arrangements. It can seem like an appealing shortcut to owning a truck and being a leased driver, but it locks you into a contract that generally benefits the company more than it benefits you; you have all the downsides of being an employee, with none of the benefits. Do the math on a lease/purchase agreement compared to purchasing your own truck and discuss the contract with a lawyer and an accountant before signing anything.

Save your pennies

Whether you plan to be a leased carrier or a common carrier, the most important thing you can do to prepare for life as an owner-operator is to save a large cash reserve. Before taking this important step, you need do detailed financial planning, and make sure you have enough money to pay for:

  • Putting a down payment on a truck, along with insurance, licensing, plate, and DOT fees
  • Pay for any business-related licenses, insurance costs, or fees, depending on your region, including consultations with an accountant and a lawyer
  • Have enough cash reserves to cover truck operational and maintenance costs
  • Have enough cash reserves to cover personal and family insurance, including medical, vision, life, and disability
  • Have enough cash reserves to cover your living expenses. Even if you are working right away, you may not be getting paid right away.
  • Have enough cash to cover contingencies and emergencies

The exact amount will vary depending on your situation and your needs, but most drivers find it necessary to save for a year or more before becoming owner-operators.

The last steps

Before you sign anything or make any final decisions, take your business plan to an accountant. It’s good to have a relationship with an accountant who you like and trust, and who knows the truck driving industry, so ask other drivers or a professional association for a recommendation.

Have them review your business plan and confirm your projections and ideas. They will be able to offer you good advice on expenses you hadn’t thought of, or deductions you didn’t know about.

Most importantly, have your accountant agree with you on how you will track your expenses. You will need to set up a system for logging all of your costs, all of your invoices, and all of your income, to make your tax filing easier and accurate. Being a truck driver involves hundreds of small, deductible expenses, from fuel and maintenance, to tolls and meals. Fortunately, there are mobile apps that make that kind of tracking simple but getting professional advice and insight before you begin is crucial and will save you money every year as an owner-operator.

With the approval of your accountant, it’s time to make some final decisions. Buy the truck, sign the contract, pay for plates and permits, get your US DOT and MC numbers, and get started on your new life as an owner-operator.

Looking after your investment

The most important thing an owner-operator can do is take care of themselves and take care of their truck. Keeping your truck in the best possible condition helps ensure that your investment pays off for a long time and saves money in fuel. When you are a company driver, you may feel that it’s okay to go hard on a truck in order to make good time, because it isn’t yours. But good driving and maintenance habits are crucial when you are driving your own vehicle.

Here are some ways you can preserve your truck, save money, and help your business be successful:

  • Find a skilled, ASE-certified mechanic who you trust
  • For some repairs and maintenance, it is good to take your truck to a dealership or franchise, because not only is there usually a warranty on the work, but you can get the warranty honored at multiple locations if you run into trouble on the road.
  • Always have work done by the right mechanic. If your dealer isn’t qualified to work on your engine, or your brake guy doesn’t know about tires, then don’t hire them to do the job
  • Keep detailed records of all maintenance and repairs, including warranties
  • Never let anyone do any work on your truck without a written estimate ahead of time, and specific, prior approval in writing
  • Drive at the ideal speed for your engine as much as is possible. Generally speaking, this is between 57-60 MPH. Don’t accept jobs that put unneeded strain on your equipment.
  • Use the engine brake when possible to prolong the life of your brakes
  • Get the oil changed monthly and a grease job weekly




Whether you have chosen to become a leased carrier or a common carrier, the life of an owner-operator is an exciting opportunity to advance your career and make more money as a truck driver. There has never been a better time to pursue this business, given how much demand there is for drivers.

The current truck driver workforce is aging, which will likely to lead to continued demand as existing drivers retire, keeping your income high for years to come. With the freedom of being your own boss and setting your own hours, you also have the risks and responsibility of running your own business. Good owner-operators frequently go on to expand their businesses, becoming trucking companies themselves and hiring other drivers. Your truck may just be the first in your fleet.