Selling below invoice once was something a dealer would do for a special customer, close friend or relative.

Today, it's a common occurrence. And given market conditions, selling below invoice threatens to become even more prevalent.

Edmunds.com through May found almost 60 nameplates representing 21 brands selling below invoice, the wholesale price the dealer pays the auto maker.

The models, all '07s, covered a range from the every man's Mercury Milan to the avant-garde Mercedes-Benz SL.

The range included a so-what $52 below dealer cost for a Pontiac Grand Prix to a wallet opening $12,358 for a Chrysler Crossfire. In other words, the astute shopper could buy a Crossfire, which is based on the Mercedes-Benz SLK, for about $26,000.

Selling below invoice is being fueled by three trends.

The first is obvious, says Jesse Toprak, senior analyst at Edmunds.com. It's the manufacturer-to-dealer incentive that has been around for a long time.

In July, European (read primarily premium and luxury); Japanese and Korean auto makers all increased their incentive spending. But a lot of that money is not on the hood in the form of customer rebates.

In an effort to protect their highly burnished brand images and still stay competitive, foreign manufacturers are relying on dealer incentives. Indeed, nine of the 21 brands that Edmunds.com found to be selling at least one model below invoice were either Asian or European.

“We use to sell at MSRP (manufacturer suggested retail price),” says a veteran salesman who works at a Honda dealership in the Gulf States region. “Now, things have changed. We don't make as much gross profit on these cars. If you've got inventory to move, you might end up selling below invoice.”

It's a touchy subject, with dealers, sales managers and sales staffers declining to be quoted for this article.

But everyone interviewed described a market place that has become much more competitive, and one where consumers arrive at dealerships armed with information that they've garnered from automotive data websites such as Edmunds.com.

That is cited as the second reason for more below-invoice sales.

“Consumers are much more informed,” says a sales manager at a Chevrolet dealership in the Greater New Orleans area. “They're getting more information off the Internet.

“They know what's in stock and they know the manufacturer's rebate. Sometimes selling below invoice is the only way that you can be competitive. You've got to give yourself a chance.”

These days, Chevy or Dodge dealers must give themselves a chance, not against Honda or Toyota dealers, but against nearby same-brand dealers who are their direct competitors.

“It's been that way for a long time,” says the Chevrolet sales manager. “Chevrolet dealers compete against Chevrolet dealers.”

Ward's found 15,710 Chrysler, Ford and GM dealerships averaged half as many sales per store as their top Japanese rivals who have fewer than 4,000 retail outlet.

Moreover, U.S.-brand brand dealers last year had about 800,000 fewer sales among them than in 2005. It is expected that this year will see even fewer sales.

That sets up a fierce competition for sales among domestic-brands dealers who are using their hold back — sales-incentive money received from auto makers — to reduce prices even more below invoice.

That's the third trend.

Dealers using their hold back to sell below invoice is becoming common in metropolitan areas where 10 or more dealers of the same domestic brand are within a 30-minute drive of each other, Toprak says, citing Edmunds.com research.

It's a simple formula. Give up some money on the front end of the sale and try to recoup it on the back end of the sale in finance and insurance department by selling extended warranties, equipment options and accessories that can be financed.

When asked if that won't lead to dealers pushing consumers to purchase something they don't need, a dealer who owns U.S.-brand stores in the Philadelphia area, says: “I don't know. Would it be a temptation? It would be a temptation for anyone.”

This dealer talks about competitors that weren't major players in the U.S. automotive market that long ago.

It's not just Chevrolet dealerships competing with each other and it's not just the Japanese taking a big share of the market, says the dealer, pointing instead to Korean auto makers becoming a force and Chinese auto makers hoping to do the same.

“Across the globe, markets are changing,” says the dealer. “As those markets change, so does ours. It's not going to be business as usual. You have to do what you can to survive.”

Such as selling below invoice. And then there's low-balling, a new twist on the onerous bait and switch.

Some sales people are quoting shoppers absurdly below-invoice prices before they leave the store.

The point is, they know no other dealership will match the quote.

When the consumer returns, the salesperson gives any number of reasons why the price no longer exists.

“What they're trying to do is tire the consumer out,” says the New Orleans area Chevrolet sales manager.

With Asians auto makers stepping up their incentive programs, Europeans trying to keep their luxury and premium cars moving, and domestic auto makers trying to halt their market share slide, expect a greater use of below-invoice selling to move the metal.

Examples of Dealers Selling Cars Below Invoice Costs
Year Make Model Name Edmunds Price Invoice Price Below
'07 Acura TL 4dr Sedan (3.2L 6cyl 5A) 29760 30848 -1088
'07 Acura TL 4dr Sedan w/Navigation (3.2L 6cyl 5A) 32122 33137 -1015
'07 Acura TL Type-S 4dr Sedan (3.5L 6cyl 6M) 33992 34968 -976
'07 Acura TL Type-S 4dr Sedan (3.5L 6cyl 5A) 34033 34968 -935
'07 Acura TL Type-S 4dr Sedan w/Summer Tires (3.5L 6cyl 6M) 34202 35151 -949
'07 Acura TL Type-S 4dr Sedan w/Summer Tires (3.5L 6cyl 5A) 34208 35151 -943
'07 Acura TSX 4dr Sedan (2.4L 4cyl 5A) 25409 25781 -372
'07 Acura TSX 4dr Sedan (2.4L 4cyl 6M) 25406 25781 -375
'07 Acura TSX 4dr Sedan w/Navigation (2.4L 4cyl 5A) 27305 27612 -307
'07 Acura TSX 4dr Sedan w/Navigation (2.4L 4cyl 6M) 27285 27612 -327
'07 BMW Z4 3.0i 2dr Convertible (3.0L 6cyl 6M) 31309 33490 -2181
'07 BMW Z4 3.0si 2dr Hatchback (3.0L 6cyl 6M) 35667 37170 -1503
'07 BMW Z4 3.0si 2dr Convertible (3.0L 6cyl 6M) 36078 39010 -2932
'07 Chrysler 300 SRT-8 4dr Sedan (6.1L 8cyl 5A) 37490 37766 -276
'07 Dodge Charger SRT-8 4dr Sedan (6.1L 8cyl 5A) 32938 33546 -608
'07 Infiniti FX35 4dr SUV (3.5L 6cyl 5A) 33760 34750 -990
'07 Infiniti FX35 4dr SUV AWD (3.5L 6cyl 5A) 35192 36126 -934
'07 Infiniti FX45 4dr SUV AWD (4.5L 8cyl 5A) 44839 45796 -957
'07 Infiniti G35 2dr Coupe (3.5L 6cyl 5A) 30590 30763 -173
'07 Infiniti G35 2dr Coupe (3.5L 6cyl 6M) 31170 31313 -143
'07 Infiniti QX56 4dr SUV (5.6L 8cyl 5A) 42678 45888 -3210
'07 Infiniti QX56 4dr SUV 4WD (5.6L 8cyl 5A) 45600 48730 -3130
'07 Mazda MX-5 Miata SV 2dr Convertible (2.0L 4cyl 5M) 18857 19022 -165
'07 Mazda MX-5 Miata Sport 2dr Convertible (2.0L 4cyl 5M) 19787 19943 -156
'07 Mazda MX-5 Miata Touring 2dr Convertible (2.0L 4cyl 6M) 21509 21606 -97
'07 Mazda MX-5 Miata Sport 2dr Convertible (2.0L 4cyl 6A) 21864 21928 -64
'07 Mazda MX-5 Miata Touring 2dr Convertible (2.0L 4cyl 6A) 22574 22619
'07 Mazda MX-5 Miata Grand Touring 2dr Convertible (2.0L 4cyl 6M) 22719 22767 -48
'07 Mazda MX-5 Miata Grand Touring 2dr Convertible (2.0L 4cyl 6A) 23758 23780 -22
'07 Mazda MX-5 Miata Touring 2dr Convertible w/Power Hard Top (2.0L 4cyl 6A) 24340 24342 -2
'07 Mercedes-Benz C-Class C230 Sport 4dr Sedan (2.5L 6cyl 6M) 26425 27574 -1149
'07 Mercedes-Benz C-Class C280 Luxury 4dr Sedan (3.0L 6cyl 7A) 29538 31062 -1524
'07 Mercedes-Benz C-Class C280 4MATIC Luxury 4dr Sedan AWD (3.0L 6cyl 5A) 31202 32736 -1534
'07 Mercedes-Benz C-Class C350 Sport 4dr Sedan (3.5L 6cyl 6M) 32609 35340 -2731
'07 Mercedes-Benz C-Class C350 Luxury 4dr Sedan (3.5L 6cyl 7A) 33193 35898 -2705
'07 Mercedes-Benz C-Class C350 4MATIC Luxury 4dr Sedan AWD (3.5L 6cyl 5A) 34869 37572 -2703
'07 Mercedes-Benz CLK-Class CLK350 2dr Coupe (3.5L 6cyl 7A) 41953 42966 -1013
'07 Mercedes-Benz CLK-Class CLK350 2dr Convertible (3.5L 6cyl 7A) 49212 50406 -1194
'07 Mercedes-Benz CLK-Class CLK550 2dr Coupe (5.5L 8cyl 7A) 48782 51057 -2275
'07 Mercedes-Benz CLK-Class CLK550 2dr Convertible (5.5L 8cyl 7A) 56484 58497 -2013
'07 Mercedes-Benz CLS-Class CLS550 4dr Sedan (5.5L 8cyl 7A) 59918 62217 -2299
'07 Mercedes-Benz E-Class E350 4dr Sedan (3.5L 6cyl 7A) 45865 47012 -1147
'07 Mercedes-Benz E-Class E350 4MATIC 4dr Sedan AWD (3.5L 6cyl 5A) 48280 49336 -1056
'07 Mercedes-Benz E-Class E350 4MATIC 4dr Wagon AWD (3.5L 6cyl 5A) 50797 51801 -1004
'07 Mercedes-Benz E-Class E550 4dr Sedan (5.5L 8cyl 7A) 52455 54870 -2415
'07 Mercedes-Benz E-Class E550 4MATIC 4dr Sedan AWD (5.5L 8cyl 5A) 54868 57195 -2327
'07 Mercedes-Benz M-Class ML350 4dr SUV AWD (3.5L 6cyl 7A) 38594 39692 -1098
'07 Mercedes-Benz M-Class ML500 4dr SUV AWD (5.0L 8cyl 7A) 43287 45756 -2469
'07 Mercedes-Benz R-Class R350 4dr Wagon AWD (3.5L 6cyl 7A) 38531 39990 -1459
'07 Mercedes-Benz R-Class R500 4dr Wagon AWD (5.0L 8cyl 7A) 45902 46965 -1063
'07 Mercedes-Benz SL-Class SL550 2dr Convertible (5.5L 8cyl 7A) 85362 88164 -2802
'07 Mercedes-Benz SLK-Class SLK280 2dr Convertible (3.0L 6cyl 6M) 39392 40316 -924
'07 Mercedes-Benz SLK-Class SLK350 2dr Convertible (3.5L 6cyl 6M) 43244 44082 -838
'07 Mitsubishi Raider LS 4dr Extended Cab SB (3.7L 6cyl 6M) 17651 18685 -1034
'07 Mitsubishi Raider LS 4dr Extended Cab SB (3.7L 6cyl 4A) 20623 21626 -1003
'07 Mitsubishi Raider LS 4dr Double Cab SB (3.7L 6cyl 4A) 21568 22552 -984
'07 Mitsubishi Raider SE 4dr Double Cab SB (4.7L 8cyl 5A) 21565 22552 -987
'07 Mitsubishi Raider Duro Cross 4dr Double Cab SB (3.7L 6cyl 4A) 24151 25130 -979
'07 Mitsubishi Raider LS 4dr Double Cab 4WD SB (3.7L 6cyl 4A) 24298 25229 -931
'07 Mitsubishi Raider LS 4dr Double Cab 4WD SB (4.7L 8cyl 5A) 25791 26722 -931
Source: Edmunds.com data through Sept. 2007.