Thanks for all the replies. I live in the NYC area and have been hard pressed to find a low mileage, 4.8i with all the features we require for less than 40K. I have found a few but they usually are missing key features or are not one of the color combos that work for us. My gut tells me that I am at the upper range of the price spectrum. I can live with spending a few thousand more provided I get a good car that is trouble free for the next several years.

Generally I have seen dealers negotiate ~$1k off of asking prices. As bd3500 mentioned, less so on fully loaded vehicles.