$20K is not a bad asking price, but you shouldn't pay any more than $18.5K for the car (if it's a non-turbo), and that's if it's truly clean and without any blemishes.

The financial risks with this car are limited by the fact that it still has 15K of warranty. Beyond that, you may find that the variability of reliability of Volvos would justify an extended warranty. As a Volvo novice, be aware that the ongoing maintenance costs for a Volvo are generally significantly higher than Japanese or American cars, although in line or slightly better than other European cars. At the dealer, you could expect to spend $300-400 on 30K mile increments, with a bill for about $1000 at the 60K service (to include a timing belt change).

The other advice I'd offer to a novice to recognize that you're not buying a car brand that's as reliable as Japanese or many American cars. According to JD Powers, the 2000's are of average reliability, which are an improvement of 98 and 99's, which are of below average reliability. I owned a 98, and it lived up to it's reputation.