Buying the 'right' first guitar for a beginner is important to that person's (beginner's) initial success. No matter how much the guitar costs, if it is too difficult to play because e.g., the strings are too high off the fretboard, the nut or the bridge is too high, the strings are too heavy a gauge, etc. then the student won't have a fair chance of learning the guitar. The guitar needs to be 'setup' properly from the beginning for the best chance of student success...the guitar needs to be playable!
>Buying without first seeing/playing/inspecting the guitar is risky. Check the instrument out, 'hands on', don't buy sight unseen if possible.
>If a relative or friend gives/loans you a guitar and it needs a simple 'setup' including new strings, a guitar tech can do that for around $60.
> If buying at a store, ask the salesperson to make sure the strings are set close to the fretboard and there is no string buzz as each string is fretted and played from one fret to another ascending up the neck. Also, if possible, ask them to check the guitar's intonation (it's a very quick/simple process) because a guitar with bad intonation will never be able to be tuned (always out of tune).
Inexpensive Acoustic Guitar Options
1. Yamaha steel string: starting at around $230
2. Yamaha steel string ¾ size: around $160
3. Yamaha classical: starting at around $250
4. Yamaha ½ and ¾ size classical: around $140
5. Fender steel string: starting at around $230
6. Fender steel string ¾ size: around $180
7. Take it up another level and get a Martin steel string for $500 and above.
Inexpensive Electric Guitar Options
1. Ibanez Gio: starting at around $200
2. Squier: starting at $190
(The price for electric guitar is for the guitar only, does not include amp and accessories.)
Coming from a little research and my experience as a teacher and player, I hope this proves helpful to interested students and parents.