3-1/2" is pretty bad, but make sure it's the gun before you go off on Savage.
I thought that was pretty good. Keep in mind that it was the 1st time out, one kind of ammo tried, scope hasn't been fine - tuned, I started and only shot at 200', (It was recommended that I dial it in at a closer distance), and my eyes really suck. (I have a specific problem, and the start of cataracts.) I was shooting at a piece of printer paper on which I had drawn a cross in blue sharpie - a thicker line than the marker draws, and I was having trouble seeing it thru the scope. AND, I had a huge brain fart. For some reason it never crossed my mind to FOCUS the scope! Now, on most of these things, I have no doubt I can improve that accuracy, and I have no doubt that the gun is capable of more; one of my groups was 1 1/4". I consider all of this to be irrelevant to a certain degree, anyway. Just coming from the angle of it's a new gun and shouldn't be like that, especially since I paid over $500 for it.