I belive your estimate is on the low side. I would definitely assume that you will be rebuilding most of this car. For all practical purposes it's shot. If this much un-maintenance was done, I'd worry about the engine and the tranny too. I know it's been asked but does the A/C work? If not, then that's another $1000 at least. I agree with the other poster....get it down to under $2000 (point out all the things that need done to the owner) and then expect to pay around $3000-$4000 to have it in good shape. For that much money you could probably buy one in good shape, but if you want to do the work to get it just the way you want it, and have the time and $$ then go for it.
Good luck!
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1998 S70 T5 Emarald Green Metallic, 2004 V70 2.5T Ruby Red, Previous Owner of Black '94 850 Turbo Wagon
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