Buying New Highlander

Currently negotiating with local dealers to buy a new Highlander (looking at 2005 V6 with 3rd row seat). As expected, a root canal would be a more pleasurable experience.

Anyhow, I obtained the invoice price from a few websites (e.g. Edmunds), but all dealers claim to have a higher invoice due to TDA (advertising fee) and a small gasoline charge. Is it normal for TDA to be considered part of the invoice? Isn't that a part of any dealership's cost of doing business, rather than the cost of the car itself? In one sense, you can argue it doesn't matter since it is the purchase price, not the invoice price that matters. But I am trying to figure out how low I can reasonably expect to go before the dealer is no longer making a sufficient profit on the vehicle to make it worthwhile for them.

Any tips? Also, interested in what sort of prices relative to invoice people have managed to obtain on a new Highlander.

It's all a matter of timing and how many cars the dealer has to drop to meet certain sales quotas. I have a friend who bought a 2004 Highlander for $300 above invoice. I've had friends who get cars for below invoice. The thing is timing and your ability to negotiate and be willing to step out and put the pressure back on the salesperson.

Invoice price is not the full story with dealers and what they pay, or will pay for the vehicle. Almost all dealers get cash back for a vehicle if they sell a certain number of those vehicles. Example, if a dealer can sell 100 Highlanders in a month, Toyota would give them $100 back for each one sold. So, say near the end of the month, if the dealer has sold only 60, he's knows he's not going to make the cut, so he says I don't want to go below invoice. If the dealer is two or three away from 100 and he knows he'll make the cut, then he might just give you car at invoice, because at the end, he's going to get $100 back for each of the 100 he has already sold, so he's really way ahead.

You have to have a poker face with dealers and be willing to walk away if the price isn't right. Just like selling a home, it's best time to sell when you want to, not when you have to. Wait it out. If you don't need the Highlander right now, then wait it out and call the dealer's bluff.

Good luck.