The Value of the FREE Mary Kay Car

It’s exciting talking about the value of that “free” Mary Kay car, isn’t it? How great to imagine not having a car payment again. We’d all like to be driving “free,” wouldn’t we?

The trouble is that the “free” Mary Kay car is not so free after all. If you don’t meet your minimum monthly or quarterly production, be prepared to pay a copay. And unfortunately, those copays exceed the real value of the car.

Here are some numbers put together by a Mary Kay sales director:

Smoky Gray Vibe Crossover or G6 $375 X 48 months $18,000
Black Saturn Vue XE/ Saturn Aura XE $500 X 48 months $24,000
PINK Cadillac CTS, DTS, or SRX $900 X 48 months $43,200

Vibe or G6 $18,000 =
1) College education for one child.
2) Pay off credit cards and debt.
3) A down payment on a small home.
4) A nice retirement investment.

Saturn Vue or Aura $24,000 =
1) College education for one child.
2) Family vacations every year.
3) A down payment on a nice home.
4) A substantial retirement investment.

Cadillac CTS, DTS or SRX $43,000 =
1) College education for two children!
2) Vacation anywhere in the world!
3) A down payment on your DREAM HOME!
4) A GREAT retirement investment!

Did you spot one big problem with the numbers above? First off, the lease terms are only TWO years for the vehicles, so the above figures are total fiction.

Besides that, it’s not as if you’re given the usage of that car with no strings attached. The amount of work that sales directors put in to scrounge up enough orders from team members usually far exceeds the value of the cars on a monthly basis.

And don’t forget: This isn’t some gift that Mary Kay is giving to the sales force. The car program costs Mary Kay Inc. NOTHING. It is fully paid for by the production and co-pays. So any Mary Kay sales force member who thinks they’re getting something “for free” is completely in the fog. This is a car that you pay for over and over and over again.. just look at your credit card bill for proof!

4 Comments

  1. Philip Arlington

    You are off beam saying that the cars cost Mary Kay Inc. nothing. They have to be paid for like a company car offered by a legitimate company. What you mean is presumably that MK Inc hopes that the extra amount of income it will receive as a result of offering the car will exceed the cost to itself of the car scheme. Maybe they do, maybe they don’t. We don’t know whether this scheme boosts or harms MK Inc’s bottom line, but we do know is that the way the car scheme is sold to prospects is manipulative and crass.

    1. TRACY

      You’re wrong, Phillip. The way the car program is set up, the company receives revenue several months in advance of paying anything for the car. And this revenue is essentially inflated…. done for the purpose of getting the car… in an amount well above what the car costs. The company ha set the program up in a way that the company will never lose. They always win because the level of wholesale orders that the recruiters have to push far exceeds any cost of the car.

    2. Lazy Gardens

      Philip … MK Inc hopes that the extra amount of income it will receive as a result of offering the car will exceed the cost to itself of the car scheme

      Hopes? Hell no. Mary Kay has the program set so that they are at zero risk to their bottom line. Here’s how.

      1 – Mary Kay is getting “fleet rates” on leasing those cars from the manufacturer, so they are spending less per car on leases than a single-car lease would.

      They don’t have a lot full of them waiting for someone to qualify, they order them as needed and the luck woman picks it up at a local dealer.

      2 – As Tracy said, there are a few months of required high production to “qualify” for the car program. And if your team doesn’t order enough, oh well, they still have all that money from the attempt.

      3 – After qualifying, if the car’s driver and her downline don’t order enough product, the car’s driver has to pay a “co-pay”, which is deducted from her commissions or billed to her if her commissions aren’t high enough. By a stunning coincidence, the maximum co-pay is higher than a consumer lease on that kind of car from a normal leasing company (we’ve done the calculations).

      So when you add up the first three factors: worst case is that MK makes enough from the car-driving unit to cover the cost of the lease and the processing.

      Best case is that a unit tries several times to qualify and fails, because MK gets all that extra ordering and doesn’t have to hand over a car.

      4 – Mary Kay brags about picking up 85% of the insurance payment. The catch is that the cars MUST be insured through their company, and the cost of the insurance is really high. The IBC’s 15% is often higher than the cost of adding another car to the IBC’s existing insurance policy.

  2. Shirley brown

    I did m k about 10 years ago and found that being a director was hard word n trying to recruit was not fun so I left mk glad I was not stuck w rooms full of mk products bought my own Cadillac thanks mk but no thanks

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