There are a lot of misconceptions out there about what the dealer's pay, where their margin's are and what terms like invoice, supplier price and employee price. It's really quite simple but people like to make it more complicated than it needs to be.
Invoice IS what the dealer pays for the car initially. It's the price that shows up on their monthly floorplan statement and the amount they pay interest on every month it remains unsold.
Holdback is a percentage of the invoice price that is "held back" by the manufacturer and paid to the dealers on a monthly or quarterly basis, depending on the company. Holdback is not paid until the vehicle is sold so it could be months from the time the vehicle showed up on the lot until the dealer actually sees the money. There are also factors at play that may limit the amount of money or holdback the dealers will actually see, it's not guaranteed. There are situations regarding holdback that a consumer may be able to take advantage of. At the end of a quarter dealers know exactly the number of cars they need to move to qualify for their holdback and bonus. They will blow out some cars well below their true cost just so they quality for the payout. Think about it, they lose a couple grand on the top line but qualify for tens of thousands of dollars in bonus that otherwise they wouldn't get.
Supplier price, sometimes called Affiliate or friends and family pricing is a fixed percentage below invoice that the manufacturer agrees to sell the vehicle for and both credits the dealer for the sale and pays them a stipend to cover the difference between the sales price and invoice. It's manufacturer supported and dealers decide whether they want participate or not, not all do.
Employee price is another manufacturers program that dealers can choose to participate in or not. This price is fixed buy the manufacturer and is usually invoice minus holdback. When a dealers sells a vehicle under this program they receive a fixed payment that may or may not have anything to do with the price of the vehicle.
There's another program that is beyond employee price used by executives that get as much as a 25% discount and the manufacturer have programs in place to make sure dealers make some profit on these deals. There's even a retiree program where separated employees can buy 1 vehicle in their lifetime at as much as 40% off and of course the manufacturer makes the dealer whole.
With all that said I still think to many dealers have played so many dishonest games in the past that they are paying the price by having to sell a $40,000 product and only realize $1500 profit. That's less than a 4% profit! Do you think that Lexus or Mercedes dealer next door is working on those margins, hell no. That's one of the reasons they have loaners, beautiful dealerships and sales people who remember you year after year. You literally get what you pay for.
Sorry for the novel but i'm bored tonight