In the past, it was hard to find decent instruments at low prices. Thankfully, manufacturers have begun producing high-quality, low-priced instruments over the past few years. For your first electric guitar, you don’t need to break the bank. I’d recommend spending between $150 and $500 (at the very highest).
Different music stores will have different inventories, but there are a few great, inexpensive brands that are easy to find and highly recommended. Danelectro, for example, makes cool-looking, cool-sounding instruments at insanely low prices, including the Hearsay, which comes with three single-coil pickups, a Fulcrum tremolo, and a built-in distortion effect and lists for $199; the Innuendo, which has similar features as well as built-in tremolo, chorus, and echo effects and lists for $269; and the 56-U2, which features two lipstick pickups (single-coil pickups housed in a chrome tube), easy playability, and a comfortable, lightweight body and lists for $299.
Ibanez also offers guitarists inexpensive instruments with great looks, playability, and sound. The company’s AX Series, which includes the AX-120 ($399.99) and the GAX-70 ($279.99), offers surprisingly good tone. Their classic looks and full-bodied sound are reminiscent of the well-known and much pricier Ibanez Artist model.
References: Music Gear – http://www.guitarplayerworld.com/gear/
As with anything artistic, tone is subjective. One person’s Holy Grail of amplifiers is another person’s worst sonic nightmare. Your best bet is to take a trip to several music stores and comparison shop to see what you like and what works best for your ear and budget.
Many stores offer package deals for the beginner. Along with a guitar, you might get a small practice amplifier, a guitar cord, picks, an electronic tuner, and maybe even a free guitar lesson or two.
Keep in mind that most salespeople are fellow musicians who share your love of music. They can help you find the right guitar or amp and also hook you up with a good teacher or any musical accessories you might need.
Beware, however, if a salesclerk seems to be pushing one brand or model too hard; he or she might be working on a sales commission with a financial incentive for selling a particular guitar.
Buying a guitar is an investment in your creative future. Take your time and shop around. Frank Zappa once said, “If you pick up a guitar and it says, ‘Take me, I’m yours,’ then that’s the one for you.” Zappa was right. When you pick up the guitar that’s meant for you, you’ll know it. Good luck and happy shopping!