The negotiating starts with the car at MSRP.
AOA has given the dealers $1500 to offer the customer off MSRP right off the bat.
After that, it's up to the dealer (and your negotiating skills) to get them to go lower than $1500 off msrp.
Most dealers, especially this late into the 08 model year, want to get rid of their 2007's. It's just costing them money to still have them on the lot when 08's are already coming in. So they should have more incentive to want to deal on 07's.

2008 A3's no longer come with the included maintenance. It's now a $590 option.
You may not be able to get it on left over 07's either, but I'm not sure.

 

The $1500 applied to '07s when I got mine in mid-July. The dealer in N.CA was upfront about the $1500 incentive and said they were willing to go $1000 under invoice so they could still make $500 on the deal, give or take. They didn't budge on the other line item marketing fees, whcih I've read elsewhere are true AoA fees rather than BS. I took the deal and they threw in some extras (premium rubber mats, etc.). I got DSG, black/black, Sline, Opensky. Only extra item I paid for was the maintenance ($590). Felt like I got a very good deal--not the very best but worthwhile.

Good luck.

 

Noob to Audi here. I was a former '05 325i owner but switched to an '08 A3 2.0T for all the convenience and driving package it offered. Just picked it up and what I negotiated in the Bay Area was $150 over invoice.

The thing is just be prepared to walk if you set your low price. Set it AT invoice first....they will laugh and then try to come back with a number above invoice that will probably be around $1500 over... just continue to stick to your guns and if after 2 or 3 different offers they don't get close to somewhere like $500 over, walk away and move to the next dealer. He may come running after you after you head towards your car.

The thing is they are at month end and quarter end right now so they need to move inventory. And the economy is not doing as well as it should be so the more volume they move, the better. They can't afford to have cars sitting around unsold.

Good luck!