Drop it like a hot brick.
Make sure they have your phone number, and let them know you're looking at other cars. Maybe there is an X5 that has caught your attention, or your friend's uncle has one he wants to sell...
For two reasons. 1) People who play games with selling prices like that need to learn a lesson. and 2) your best chance of buying it at the offerred price is to get into the armchair and ignore them. If they think you're going away and looking at other cars or losing interest, they might realise that a bird in the hand is worth two in the bush.
You also have to ask yourself what other dishonesty is going on with that car. If you do land up buying it, make sure you get a thorough and independant PPI.
Good luck..
Michael