Why there’s no such thing as a free MLM car
Tempted to join an MLM by the possibility of earning a car bonus? Find out why there’s no such thing as a free car – and why you need to beware signing a lease for one.
The chances are, if you have a Facebook friend who is with an MLM you’ll have heard about the ‘free’ cars many offer their reps. Perhaps you’ve seen a social media post like this:
Or this one:
Or maybe you have a friend who’s shared her ‘car presentation’ (you can’t really miss it, we’ve seen less excitement over weddings)!
Cars bonuses are clever ways to tie you into MLMs
Car bonuses are great for MLMs. They’re a physical demonstration of the apparent wealth and luxury lifestyle you can attain if you join them. (One of the conditions of a car bonus is that you add the MLM logo to your car; and many also insist on a specific make/colour, such as a white Mercedes.)
But what about for the reps? Are the free cars as desirable as they appear at first?
We don’t think so. As you might expect, a gift as ‘generous’ as this comes with strings. And these can be very expensive strings if you don’t maintain your status.
In fact, not only are car bonuses great promotional opportunities for the MLMs themselves, they’re a very clever way to tie reps into maintaining a particular level of sales – and motivate them to continue to put pressure on their downlines. Win-win for the MLM, bad news for their reps.
How can you earn a ‘free’ car?
So what do you have to do to earn a ‘free’ car with an MLM? To start with we need to clarify the word ‘free’. You see, MLMs don’t actually give you a car. Instead, they give you a payment towards the lease or purchase of a car. And the lease or purchase needs to be taken out by you, in your name.
So, in fact, what MLMs actually do is encourage you to commit to lease payments for a car (often at dealerships they specify). And if you don’t maintain your sales, they withdraw their contribution to your lease payments, leaving you to shoulder the burden of the entire amount.
Don’t believe us? Here’s one MLM rep admitting that the ‘car bonus’ isn’t all it seems:
How does Arbonne’s car programme work?
Let’s look at Arbonne’s car plan as an example. (You can read how few Arbonne reps actually make any money here.) To qualify for your ‘free’ car, you need to reach a certain level in the company. Here’s Arbonne’s Mercedes-Benz Cash Bonus Programme qualifications table:
As you can see, you’re required to maintain a certain QV (Qualifying Volume of sales) to receive your bonus payment. If not, you lose the bonus:
“If you are reassigned to Independent Consultant rank under 3.8 of the Policies & Procedures, then you will no longer be eligible for the Mercedes-Benz Cash Bonus Programme.”
In order to receive your cash bonus in the first place you must already have leased or purchased the car yourself. You need to provide proof of this, plus proof you have displayed the Arbonne emblem in three places on your car (see examples below) in order to receive the bonus:
Worryingly, given what happened at LuLaRoe, Arbonne reserve the right to change their SuccessPlan at any time:
So, to sum up, to qualify for payments towards a white Mercedes Benz, Arbonne reps must buy or lease a car in their own name, and provide proof they are displaying the Arbonne emblem in three places on it. They must also maintain their rank and qualifying volume of sales. And Arbonne can change the rules on this at any time they wish.
Here’s what can happen when those car payments stop:
“And our “free” car- well I continue to pay my “free” car payment of $1,100.00 a month. I received a $1,000.00 car payment from Arbonne so it wasn’t a big deal AT THE TIME. Our family needed a SUV so the car we needed came with a payment like that. They force you to buy a Mercedes which I always thought was wrong. So now I am stuck making these huge payments with no Arbonne check. My car has imploded in value and I am so upside down I can’t trade it in. Every time I have to drive it I am reminded of this whole saga.”
“Car presentations are clearly just a recruiting event”
And then there’s the car presentation day. These events are billed as a celebration of the rep’s achievements, but as this woman discovered, are really just yet another recruitment opportunity:
“The presentation had a lot of ‘break downs’ on how to make Arbonne work for you – this is supposed to be a celebration, but it’s clearly a recruiting event.”
As Arbonne themselves admit:
“This is a special bonus to help you grow your business and celebrate with your upline! Invite everyone you know to make it extra special. Arbonne will provide [US]$700 [or £450 in the UK] SRP worth of complimentary products to be used as door prizes, drawings, or giveaways at your very own Mercedes-Benz Car Presentation.”
Is Arbonne a pyramid scheme? Read our investigation into the company here.
How does FM World’s Drive For Success bonus work?
Like Arbonne, FM World also run a car incentive, called Drive For Success. Here’s how it works. This is their 2017 plan, and while small details may have changed (you can now lease a Mercedes, Range Rover or Audi), the structure of the plan will have remained the same. Here’s an example of one of the qualifying ranks from it:
As you can see, as with Arbonne you need to qualify for the plan via your own and your downline sales. And just like Arbonne, there are strict rules around acquiring and keeping your car once you qualify for the plan. Namely:
- You must lease a car (in this case a Mercedes-Benz) for either three or four years, depending on your level.
- The lease is in your name.
- FM World have the right to choose the dealer you lease the car from.
- You are responsible for all other costs, including insurance, tax etc.
- If you do not maintain the required level for the car plan, FM World will not pay you your monthly bonus.
Here’s the small print outlining this:
So like Arbonne, when you qualify for your car plan in FM World you take all the financial risk and responsibility. You lease an expensive car in your name, for a number of years, and if you don’t maintain your sales AND your downline sales, you need to keep paying out of your own pocket… or risk the car being repossessed and your credit rating ruined.
It’s a clever way for an MLM to keep pressure on you to make sales, and put pressure on your downline to do the same, don’t you think?
Why ‘free’ cars are just a cruel MLM trick
Aside from the fact that the ‘free’ MLM car is anything but, there’s something far more disturbing about the whole charade. And that’s the cruel, sleight of hand trick that’s really being played.
You see, unlike a proper, paid job, MLMs don’t offer benefits like salary, holiday, sick and maternity pay, workplace perks and legal protection. Instead they need to grasp around for some other tangible benefit to dangle in front of potential unpaid reps. And that benefit is the car bonus.
However, the ‘free’ car is merely a distraction from the reality. They hope you’ll be so blinded by the car that you won’t notice the ‘successful’ MLM rep posing next to it is still wearing Primark. That you won’t properly research their ‘income opportunity’ with truly independent sources. And that you won’t discover that 99.6% of MLM reps on average lose money.
(Read this real life experience to discover how you can be a top seller and earn the top car bonus, and STILL be as much as $40,000 in debt with an MLM.)
So while you’re admiring the shiny white Mercedes and dreaming of owning your own simply for posting on Facebook from home, you won’t notice you’re paying to join a scheme that will, quite possibly, rob you of hope, money, friendships and self-respect.
Beware signing up for a ‘free’ car you can’t afford
The lesson here is that nothing is truly free in life, and certainly not in an MLM. The gifts they bestow upon you are to ensure you have something to boast about to recruit. And the ‘free’ car is simply a way to demonstrate success, and commit you to continue maintaining your sales level (and that of your downline).
So if you can’t afford to pay for the lease of a car without your MLM bonus, then don’t risk signing up for one. Better still avoid joining an MLM altogether and find a more realistic, sustainable way of earning an income!
This video explains the MLM ‘opportunity’ perfectly:
Read more about why the MLM model doesn’t work
The more we learn about MLMs the more we believe they don’t work for up to 99.6% of the people who pay to join. You can read more about why this is the case in these articles:
- The 10 ugly truths MLMs don’t want you to know
- How much money can you really make working for MLM Arbonne?
- How much money can you really make working for MLM Stella&Dot?
- Thinking of joining an MLM? Read the truth behind the ‘income opportunity’
- How much money can you really make working for MLM Herbalife?
- How much can you earn with MLM Younique? (We calculate it’s probably less than $14 a month)
Photo by Frank Albrecht