After you've made the basic decision about the size of the guitar you want to buy, the next question is usually, "how much should I spend?" Well, I'm really not trying to be coy here, but I have to answer - as much as you want! That is to say - as with most things, "you get what you pay for." Assuming you're the person I was talking about in Part One, a serious beginner or someone who wants to upgrade an old or no longer functional instrument, I would count on spending a minimum of $300 for something decent with either a gig bag or a hard case. That figure is truly about as low as you can go; you will have many, many more options in the $500 - $600 range. As a practical matter, you don't want to go through this exercise again in a couple years and that could very well happen if you go very low-end. And you might want to even bump that figure up a bit higher.
In any case, what makes one guitar worth twice as much as another in this lower range of instruments? Things like the quality of the wood - a solid top is a must and solid backs and sides are very nice to have too, sound-wise. Built in electronics may be something you want and while they are quite variable in sound quality, on-bound electronics will add to the cost.
Then there are things that I'll group under the heading of "bling." Fancy inlay on the fretboard and around the sound hole are nice touches, but if two models were virtually identical in terms of wood and over-all build but there was a price differential due to bling, I would opt for opt for the less expensive model and put the savings into something like a better case or perhaps necessary accessories like a tuner, capo and some spare sets of strings. But that's just me. If you like the fancy look, go for it!
Although both Martin and Taylor make new guitars that touch on the $500 - $600 price range (when discounted), I am going to recommend that you go with one of the mid or higher line models from the import companies like Yamaha, Alvarez, Recording King, Takamine or others. As much as I love Martins and Taylors, I do not think their lower priced models sound any better than the mid priced imports. And in some cases, the imports sound better. This is nothing more than pure economics. The cost of producing guitars in this country is higher than in Asia, by a long shot. So dollar for dollar, it is likely you will get much for your money with an import. There are certainly some who would debate this and it is possible to find some very nice used lower end Martins like the -16, -15, -1 or DM series (often special models made for Musician's Friend or The Guitar Center) on Craigslist for around $600 or so. Worth looking for I think as those guitars are likely to hold their value better than an import.
The main advantage of buying a new instrument of this general quality level is the warranty. Again - you get what you pay for. Many guitars in the $200 - $600 price range are going to need some sort of repair in their lifetime and if that repair is needed in the short term, having a solid warranty is very nice indeed. That is not to say a very, very expensive guitar will NOT need repair at some point, just that the less expensive ones are more likely to, and sooner. Worth considering!
So there you have it. A very, very general overview of things to think about when buying a less expensive guitar. I welcome any questions anyone may have about the points I've made. Good luck in your quest, and know that sooner or later, like all guitarists, you WILL develop a case of GAS (Guitar Acquisition Syndrome!).
Peace & good music,