Used car markup?

Was at an independent used car dealer today. The car I was looking at was listed at $17806. I offered $16000 + $960 tax = $16960. They came back with $17423 + $1045 tax + $21title fee = $18489.

I told them I had to think about it and left on good terms. Am I out in left field thinking they have more markup to play with? Or is this where we are at these days.

The car is a 2015 Toyota RAV4 with 97000miles on it, decent car fax with minor damage noted on the front back in 2024, but no signs of repair, so it was well done. The rest of car appears like you'd expect for the miles. Two owners with some service records but not a lot of service records.