Squabbles about the definition of "new" aside, it sounds like a great deal. I'd still offer $500 less and walk out for a day if they turn you down. It's been sitting that long, they want it gone.
Also consider that you may need to replace the tires, change the oil, etc.
Johnny, I'm not sure why anyone trades a bike in anyway. It's just lazy, if you ask me. It's not hard at all to take out a (free) ad on Craigslist for $500-$2000 over trade-in value.
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