Can a dealer sell a car below invoice?

Yes, it happens, especially on slow-selling models, outgoing model years, or when the manufacturer is paying dealer incentives. Because of holdback and factory-to-dealer cash, a dealer's actual cost can be below the invoice figure. That doesn't mean every car can be bought below invoice; popular vehicles in short supply may sell at or above MSRP. Use invoice as one reference point and compare real out-the-door quotes from several dealers.