I have an '05 S40 T5 with 86k miles on it and it's been a great car, with the exception of a new issue with it idling rough for 3 to 5 seconds upon cold-start, which the dealer can't seem to figure out. I also had an '06 S40 2.4i previously, which I loved, but I really wanted the T5 (2.5 litre turbo) and a 6-speed manual. I paid $12,500 (out the door) for my T5 about a year ago with about 75k miles on it, so comparatively, assuming the one you're looking at is not a T5 (in other words, the 2.4i), at first blush that price seems reasonable if the car seems well-maintained, clean, with a clear title and free of paint and body work. I'm not 100% sure, but I believe it will need a timing belt around 100k miles.