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Is this person you know a salesman or entry level manager? Because he's being lied to by the dealership. Dealers pay salesman a commission, on new cars its 33% of the profit and 25% on used. The the profit falls below that number the minimum commission is usually $200.
Dealers decided the salesmen were making too much money and invented something called a pack. This is usually $1000 to $2000 on every car. On the books the car's invoice is that inflated number. This $1000-$2000 goes towards overhead or whatever else. So its very feasible for a $38000 car to only make $160.
This happened to me when I was working at a local Chevrolet/Cadillac/BMW dealer back in 2007. There was $10,000 in profit in the new Escalades that came out that year and pretty close to that on the loaded Tahoes, Suburbans, and Silverados. People were excited about them and paying near full price. They decided a few months in to put on a $2000 pack with these vehicles; we noticed suddenly the "cost" of the vehicle jump that amount.
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