Lease Purchase Programs

How Carrier-Controlled Debt Drives Drivers Past the Point of Safety

A lease-purchase program is an arrangement in which a motor carrier, or a financing entity affiliated with the carrier, leases a truck to a driver under terms that nominally allow the driver to “own” the truck after completing a series of payments. The payments are deducted directly from the driver’s earnings. The driver is classified as an independent contractor. The driver operates the truck exclusively for the carrier that controls the lease. And the economics of the arrangement, as documented by the FMCSA’s Truck Leasing Task Force in its January 2025 report to Congress, are structured so that the driver frequently cannot earn enough to cover the lease payments, operating costs, and basic living expenses simultaneously.¹

The Task Force’s findings were unequivocal. After reviewing public comments, litigation records, settlement sheets, and driver testimony, the Task Force reached a consensus recommendation that lease-purchase programs “should be prohibited” because they “cause widespread harm without offering meaningful scale opportunities for truck and small business ownership."² The report documented that these programs are “regularly established to enrich motor carriers at the expense of drivers” and that they “promote a race-to-the-bottom in driver compensation and treatment, pushing qualified drivers out of the profession."³

The safety implications are direct and severe.

A driver trapped in a lease-purchase arrangement that produces negative paychecks has an overwhelming economic incentive to:⁴

The Consumer Financial Protection Bureau, serving as technical advisor to the Task Force, issued its own report observing that the contractual structures signed by lease-purchase drivers “may disincentivize the safe operation of vehicles", including "driver compliance with the hours of service regulations and laws governing speed and safety."⁵ When a crash results from these pressures, the carrier that created and profited from the arrangement bears responsibility not just for the driver’s conduct but for the economic system that made the conduct predictable.

How Lease-Purchase Programs Work

The mechanics of a typical lease-purchase program create an economic trap that is difficult for the driver to recognize at the outset and nearly impossible to escape once committed.

The carrier offers the driver a truck, typically a used vehicle, under a lease that requires weekly payments deducted from the driver’s settlement. The driver signs both a lease-purchase agreement for the truck and an independent contractor operating agreement with the carrier.⁶ Under the operating agreement, the driver hauls freight exclusively for the carrier under the carrier’s operating authority. The carrier dispatches the loads, sets or negotiates the rates, and controls the settlement process.

The carrier deducts the following from the driver’s gross revenue before remitting the balance to the driver:⁷

The result, documented repeatedly in the Task Force’s findings and in court filings reviewed by the Task Force, is that drivers frequently receive net compensation of zero or less.⁸ The industry term for this outcome is “going in the hole,” and it is so common in lease-purchase programs that drivers universally recognize it.⁹ When the driver’s net compensation is negative, the deficit is carried forward as a debt owed to the carrier, which is deducted from the next settlement. The driver’s debt to the carrier grows, the driver’s ability to leave the arrangement diminishes, and the economic pressure to keep driving intensifies.¹⁰

The CFPB report noted that these arrangements often lack the financial disclosures required in consumer lending. Truck leases are governed by 49 C.F.R. Part 376, not by the Truth in Lending Act or the Consumer Leasing Act, and the disclosure requirements under Part 376 focus on protecting owner-operators from unfair carrier practices rather than on communicating the cost of financing.¹¹ Finance companies can get drivers to sign leases “without ever being informed of basic financial information about the cost of financing, such as annual percentage rate (APR) equivalents or finance charges."¹²

The Safety Consequences

The connection between lease-purchase economics and safety is not theoretical. The CFPB report documented specific instances in which the contractual structures pressured drivers to violate safety regulations.

Drivers reported being asked by "the motor carrier to work beyond legally allowable hours of service."¹³ One driver stated "that when he would normally shut down for a 34-hour reset, the motor carrier would reset his clock and ask him to haul another load."¹⁴ Under his contract, an “educated dispatch" provision required him to “accept the loads booked by the dispatcher,"¹⁵ creating a contractual obligation to accept loads even when doing so would require violating hours-of-service regulations.

Drivers also reported pressure to operate unsafe equipment. When a driver identified a mechanical defect that required repair, the economic structure of the lease created a conflict: the cost of the repair came out of the driver’s pocket, but stopping to make the repair meant losing revenue needed to cover the lease payment.¹⁶ The CFPB report observed that drivers “may be pressured to choose between making expensive repairs needed to maintain a safe vehicle and the imperative to continue hauling loads."¹⁷

These pressures directly implicate the carrier’s obligations under federal regulations. Under 49 C.F.R. § 392.3, no motor carrier may require or permit a driver to operate a commercial motor vehicle while the driver’s ability or alertness is so impaired through fatigue, illness, or any other cause as to make it unsafe to operate the vehicle.¹⁸ Under 49 C.F.R. § 390.6, a motor carrier may not coerce a driver to operate a CMV in violation of the FMCSRs.¹⁹ The FMCSA’s anti-coercion rule, adopted in 2015, specifically prohibits carriers from threatening to withhold work opportunities or take adverse employment action to induce drivers to violate safety regulations.²⁰

A carrier that structures its lease-purchase program so that the driver cannot earn a living without violating hours-of-service regulations, and that includes contractual provisions requiring the driver to accept dispatched loads, has created an economic coercion mechanism that accomplishes through financial pressure what the anti-coercion rule prohibits the carrier from accomplishing through direct threats.

The Federal Regulatory Framework

The Truth-in-Leasing regulations at 49 C.F.R. Part 376 govern the leasing of equipment between carriers and owner-operators.²¹

These regulations were originally promulgated to protect owner-operators from exploitation by carriers, and several provisions are directly relevant to lease-purchase programs:²²

• Under 49 C.F.R. § 376.12(d), the compensation to be paid by the carrier must be clearly stated on the face of the lease.²³
• Under § 376.12(h), the lease must clearly specify all items that may be deducted from the driver’s compensation, together with a description of how each deduction is computed.²⁴
• Under § 376.12(i), the lease must specify that the driver “is not required to purchase or rent any products, equipment, or services from the authorized carrier as a condition of entering into the lease arrangement."²⁵
• Under § 376.12(f), payment must be made within 15 days of submission of required paperwork.²⁶
• Under § 376.12(g), when the driver’s revenue is based on a percentage of gross revenue, the carrier must provide a copy of the rated freight bill.²⁷

The Task Force documented widespread noncompliance with these provisions in lease-purchase programs.²⁸ Carriers deducted items not specified in the agreement, controlled escrow accounts without adequate disclosure, and failed to provide the accounting transparency the regulations require.²⁹ The Task Force noted that “provisions in leases allow carriers to deduct the cost of the lease and defer them to the lessee,” which “violates the leasing rules (49 CFR 376.12), prohibiting drivers from having to purchase anything from the carrier as a provision of the lease."³⁰

Under 49 U.S.C. § 14704, a person or carrier may bring a civil action to enforce the leasing regulations and recover damages.³¹ However, as the Task Force noted, most lease-purchase agreements contain forced arbitration clauses that prevent drivers from pursuing claims in court, and the economic devastation of the lease-purchase experience leaves most drivers without the resources or will to litigate.³²

Carrier Liability When Lease-Purchase Pressure Causes a Crash

When a driver operating under a lease-purchase arrangement causes a crash, the carrier’s liability exposure extends well beyond respondeat superior. The lease-purchase structure creates multiple independent bases for the carrier’s negligence.

The carrier bears vicarious liability for the driver’s negligent conduct under the statutory employment doctrine. Under 49 C.F.R. § 390.5, the driver is an “employee” of the carrier regardless of the independent contractor label.³³ Under 49 C.F.R. § 376.12(c)(1), the carrier has assumed “exclusive possession, control, and use” of the equipment and “complete responsibility for the operation of the equipment."³⁴ The carrier cannot escape vicarious liability by classifying the driver as an independent contractor.³⁵

The carrier bears direct liability for creating the economic conditions that pressured the driver to violate safety regulations. If the driver was fatigued because the lease economics required accepting every load to avoid falling behind on payments, the carrier’s lease structure is a proximate cause of the fatigue.³⁶ If the driver was operating an unsafe vehicle because the lease economics made repairs unaffordable, the carrier’s lease structure is a proximate cause of the mechanical deficiency.³⁷ If the driver was speeding because mile-based compensation and lease payment obligations created financial incentives to maximize speed, the carrier’s compensation structure is a proximate cause of the speeding.³⁸

The carrier bears liability for coercion under 49 C.F.R. § 390.6 if the contractual structure of the lease-purchase agreement effectively compelled the driver to violate safety regulations to avoid financial ruin.³⁹ The anti-coercion regulation does not require an explicit threat. Economic pressure that leaves the driver no realistic alternative to violation is itself coercive when the carrier controls both the work and the debt.⁴⁰

In jurisdictions that permit punitive damages, the carrier’s knowing use of a lease-purchase structure that predictably produces safety violations through economic pressure supports a finding of conscious disregard for the safety of the public.⁴¹ The FMCSA Task Force’s findings, documenting the industry-wide pattern of harm, establish that the risks of these programs are known and foreseeable. A carrier that operates such a program after the Task Force’s January 2025 report cannot credibly claim ignorance of the consequences.

What Discovery Should Target

Discovery in a lease-purchase crash case should expose the economic reality of the arrangement and the pressure it created on the driver.

Key categories include:

• The complete lease-purchase agreement, including all addenda, amendments, and side agreements.⁴²
• The independent contractor operating agreement governing the driver’s relationship with the carrier.
• All settlement statements for the driver for the 12 months preceding the crash, showing gross revenue, deductions, and net compensation for each pay period.
• All communications between the driver and the carrier’s dispatch system, including load offers, load acceptances, and any communications in which the driver expressed concern about hours, fatigue, equipment condition, or financial pressure.
• The carrier’s load acceptance and refusal records for the driver, showing the rate at which the driver accepted dispatched loads and whether refusals triggered adverse consequences.
• The driver’s ELD data for the 30 days preceding the crash, showing hours-of-service compliance patterns.⁴³
• The carrier’s maintenance records for the truck, and any evidence that the driver deferred maintenance due to cost.
• The carrier’s marketing materials for the lease-purchase program, including any projected earnings, ownership timelines, or financial representations made to the driver.⁴⁴
• The carrier’s internal data on lease-purchase driver turnover, completion rates, and average net compensation, which establishes whether the carrier knew the program was not economically viable for drivers.
• Any complaints filed by other lease-purchase drivers with the carrier, FMCSA, or the FMCSA National Consumer Complaint Database regarding the program’s economics or safety pressures.⁴⁵

The objective is to demonstrate that the carrier designed and operated a lease-purchase program that created predictable economic pressure on the driver, that the pressure resulted in the specific safety violation or condition that caused the crash, and that the carrier knew or should have known that the program’s economics would produce exactly this outcome.

Sources

• [1] FMCSA Truck Leasing Task Force, Findings on Common Leasing Arrangements Available to Drivers of Commercial Motor Vehicles, Including Lease-Purchase Agreements — Report to Congress and U.S. Secretaries of Transportation and Labor (Jan. 2025).
• [2] Id.
• [3] Id.
• [4] Consumer Financial Protection Bureau, Observations on Truck Lease-Purchase Agreements — CFPB Staff Report for the Department of Transportation's Truck Leasing Task Force (Jan. 17, 2025).
• [5] Id.
• [6] FMCSA Truck Leasing Task Force, supra note 1.
• [7] 49 C.F.R. § 376.12(h), "Lease requirements".
• [8] FMCSA Truck Leasing Task Force, supra note 1.
• [9] Id.
• [10] Consumer Financial Protection Bureau, supra note 4.
• [11] Id.
• [12] Id.
• [13] Id.
• [14] Id.
• [15] Id.
• [16] Id.
• [17] Id.
• [18] 49 C.F.R. § 392.3, "Ill or fatigued operator".
• [19] 49 C.F.R. § 390.6, "Coercion prohibited".
• [20] Prohibiting Coercion of Commercial Motor Vehicle Drivers, 80 Fed. Reg. 74695 (Nov. 30, 2015).
• [21] 49 C.F.R. Part 376, "Lease and Interchange of Vehicles".
• [22] Jessica Goldstein, The Lease and Interchange of Vehicles in the Motor Carrier Industry, 32 Transp. L.J. 131 (2004).
• [23] 49 C.F.R. § 376.12(d), "Lease requirements".
• [24] 49 C.F.R. § 376.12(h), supra note 7.
• [25] 49 C.F.R. § 376.12(i), "Lease requirements".
• [26] 49 C.F.R. § 376.12(f), "Lease requirements".
• [27] 49 C.F.R. § 376.12(g), "Lease requirements".
• [28] FMCSA Truck Leasing Task Force, supra note 1.
• [29] Id.
• [30] Id. (findings reproduced at App. 5, Task 23-2 discussion notes).
• [31] 49 U.S.C. § 14704, "Rights and remedies of persons injured by carriers or brokers".
• [32] FMCSA Truck Leasing Task Force, supra note 1.
• [33] 49 C.F.R. § 390.5, "Definitions".
• [34] 49 C.F.R. § 376.12(c)(1), supra note 7.
• [35] Johnson v. S.O.S. Transport, Inc., 926 F.2d 516 (6th Cir. 1991).
• [36] Consumer Financial Protection Bureau, supra note 4.
• [37] Id.
• [38] Id.
• [39] 49 C.F.R. § 390.6, supra note 19.
• [40] Prohibiting Coercion of Commercial Motor Vehicle Drivers, supra note 20.
• [41] FMCSA Truck Leasing Task Force, supra note 1.
• [42] 49 C.F.R. § 376.12, supra note 7.
• [43] 49 C.F.R. Part 395, "Hours of Service of Drivers".
• [44] Consumer Financial Protection Bureau, supra note 4, § 3.1 ("Potentially confusing earnings and expenses projections").
• [45] FMCSA National Consumer Complaint Database.