I think it probably depends on the car model and the time in the sales cycle. All sales men have targets and so are more willing to negotiate at particular times (e.g. end of quarter) when they need to hit their target. I believe christmas is a very bad time for them and you can get good deals in the new year.
My experience when looking for a new car was that the VAG dealers were unwilling to negotiate and don't like cash buyers since they probably make a fair amount of money selling finance and gap policies.
When I was negotiating with a VW dealer for a new car it seemed we were talking a different language.
In the end I ended up using this site
http://www.orangewheels.co.uk/ and buying the car over the internet. It was exactly the same specification car but at a much more reasonable price. You pick the car up from a dealer and it is a UK specification car not an import or European model.
Basically this site has group purchasing power. They put a lot of orders through to a specific dealer who in turn gives them a reasonable discount. Worth checking out, I found the whole process to be smooth and hassle free and more importantly I was able to use this approach to compound discounts. I scraped a car which gave me £2000 for an old banger and through the site saved another £800 and then through a slip up on the build I got another £500 worth of extras for free.
So overall it saved me £3,300 or around £1,200 over what I would have got from the dealer.
