Have you done some online price-comparisons ? You should be able to look at some ads for this year of vehicle that are for sale and see what the price for that style 2017 Sportage is running, and then you will have a better idea if they are asking a reasonable price for the one you looked at. There are also websites that do comparisons of performance and reliability, as well as suggesting the price range for each vehicle. If you can see that this dealer is way overpriced, then you also have ammunition for when you go back to talk with him about lowering the asking price. Here is the Kelly Bluebook website, and this should give you a good place to start price-checking; but I think that it is also good to look at some of the actual sales websites, and even places like craigslist. https://www.kbb.com/kia/sportage/2017/
It depends on what the Blue Book value on that car is Steve? $3500 difference is not a small difference to me and I do believe they can either come down on the price or give you more for your trade in, etc. I can tell by your post that both you and your wife really like that car and want it...the Sales person can probably tell this too so that's probably why they are holding firm on the price. Playing the "buy a car" game is often not very much fun because the Sales person wants to make the most off the deal in many cases, whereas it is always better if both customer and sales person feel the came out a winner in buying and selling a car. With a difference of $3500 I certainly feel there is room to give you a better deal...but if you feel that car is worth the difference and are willing to pay it then go for it. I would try to do get them to bring that difference down some and that will probably involve some back and forth volleys, etc. If the Blue Book Value is near the price they are asking then you have less leeway in bargaining.
BOTTOM LINE He came down $2000 and I came up $1500 and I bought the car.. 2017 Kia Sportage with 12,000 miles (it was a one year lease) AWD, heated seats, back-up camera, and the balance of warranty till July 2022 which is 5 years and it is a 100% warranty from bumper to bumper excluding wear of tires and brake linings.. It is a dark grey/blue with a black interior..
Hyundai and Kia are both products of South Korea. I would trust them both to be reliable and well-made. I have owned 27 automobiles, and have found the 7 Japanese models I've owned to be the most trouble-free. (Toyota, Mazda, Honda, Hyundai, Mitsubishi.) My present Mazda 3 (6-1/2 years old, 22,000 miles) was built in Hiroshima, and I cannot detect any residual radioactivity from the event which occurred there 73 years ago. Hal