OK-- now we are REALLY in my area of expertise: guitars!
I agree wholeheartedly with the endorsement of the Canadian made Seagul. They make a great guitar with solid wood top which makes a big difference in sound. They are also easy to play and well made. The Martin DM is good too (will be slightly more than the Seagul), and the Martin 15 series is ALL solid wood (in this case Mahogany) and is a great deal. You may also want to look at Guild (now owned by Fender and still made in the US of A) and the lower end Taylors (which are also all solid wood and a great deal). I personally am not a fan of Gibsons, but others like them. If I were you, I would try for a North American made guitar if possible, and steer away from Korean and Chinese made instruments. The North American guitars will hold their value should you decide you ever want to sell them, and are generally of better quality. Of course, Yamahas, Takemines and Alvarez’s are all fine too, and may be less expensive, but I would choose Seagul or a Martin any day, all things being equal.
(OK-- whomever said that their Yamaha sounds as good as any Martin has just not played enough nice Martins, especially the newer “vintage” models (like the D-18V, HD-28V, D-18 GE, etc.). These things are amazing!)
OK-- back on topic.
Make sure any new guitar you buy is set up properly. If the action is too high it will be painful to play and you won’t want to play-- thereby negating the purpose of getting a guitar: i.e. to play it! If the action is too low, it will be real easy to play but will buzz which is annoying and will make you not want to play (see above). I would much rather pay a few bucks more at a nice small shop that knows what they are doing and will set the guitar up properly than buy from a Guitar Center or Mars where they may just pull the guitar out of the shipping box and hang it on a wall, without altering the action or anything. Set-up is crucial, and even a small difference makes a world of difference in playability!
If you go used, you can get alot more guitar for your money. But make sure you know what to look for. The most common problem you will find in a used guitar is action that is too high. Sometimes the saddle (the thing the strings rest on in the bridge) can be lowered to compensate, but frequently, there will not be enough saddle left to fix the problem and the guitar will need a neck reset. This is a fairly common procedure (nearly all guitars will need one sooner or later-- without getting into boring detail, the string tension will slowly pull things out of whack and will eventually need to be straightened out-- its very normal and natural and nothing to be concerned about) but it will cost between $200-$300 usually, depending on the type of guitar. While it is not a bad deal to buy a nice 60’s Martin D-28 used and then have the neck reset, on a low priced guitar, this may eat up any savings you may have gained by buying new and, for some low-priced guitars, may not even be possible due to the way the neck is attached. Plus, if you buy a new Martin, the guitar comes with a life-time warranty, which includes any future neck resets. This is a good deal, and Martin never quibbles about their warranty. It is the best warranty in the world for any product (and I am not exaggerating).
OK-- lets assume the action is OK. Then, look at the frets to make sure they are not too worn. Usually the first 3 to 5 will be were the most wear is. Play some chords in first position and check for string buzz..
Frets OK? then sight down the neck (hold the headstok up to your chin and look along the length of the fretboard). If the neck looks warped or twisted, run away! Neck look for cracks in the body-- especially the top. Small cracks are generally not too troubling and can be easily repaired. Big ones or ones in the wrong places can mean trouble. Ckeck that the tuners work, and that the bridge is not cracked or lifting off the top .
(sidebar No. 2-- grain iun the top are ususally meaningless. Narrow or wide, there is no recognized standard. Some people may think narroew grain looks better, but a wide grain may sound better and visa versa. I am also dubious of how much you can really tell by wacking the top with your knuckles other than to perhaps detect a loose brace.)
OK-- final step: if all looks structurally sound, play the thing. If it doesn’t sound good, why bother?
Used guitars are a bit more work and may carry a bit more risk, but they can really be worth it. Again, go to a place with a good rep, because some of the “bigger” stores (who will go unnamed) may try to sell you a lemon.
Just as an example, I have owned over the years over twenty guitars, all of which, except for four, were bought used! I’ve never regretted buying used and have always made my money back when I sold them! (I have the guitar equivalent of WhOA-- called Guitar Acquisition Syndrome or “GAS” for short.
Good luck!
Tres