Originally Posted by mathgeek

I see your point. The problem right now, though, is sales volume. Essentially, the only people who are buying new cars right now are those who need a car (as opposed to just wanting one). And most people have a car already. Uncertainty about one's job and home value are causing people to reign in their discretionary spending - the exact thing that drove gratuitous purchases of new cars when they weren't needed (and I am guilty of doing this from time to time). I think that a dealer could get by quite nicely selling all of their inventory at invoice provided that they sold a lot of cars. The problem is that sales volume is very low right now. Theoretically, a dealer who is selling fewer units would have to raise the selling price of each one in order to make up for the lower volume. Of course, that doesn't do much for sales. It's a bad situation all around. Dealerships are closing all over the place, and that's not good. However, there are those who, in the name of self-interest, will exploit this difficult situation and try to get a car for as little money as possible. It's just human nature.