the best advice i can give you is to just tell the salesman your budget and either he can show you a very good guitar around that price, or you can get him to throw in some stuff like a strap, picks, maybe a free case or case half off, if you buy the guitar full price. if you show the salesman you're gonna spend around $400 to get what you need, he's gonna make sure you don't spend it elsewhere, if he's a good salesman.

keep trying to negotiate. the worst thing that can happen is if the salesman ways "non-negotiable". then you can either pay full price or look somewhere else.