The worst mistake a beginner can make is to buy a poor-quality, inexpensive guitar. These guitars are closer to toys than to real musical instruments and can cost from $59 to $199 (or even more). There are two reasons for this mistake: 1) usually this kind of guitar is more difficult to play and has inferior sound. This discourages the beginner because it hurts the fingers to hold the strings down and a good tone is never achieved; 2) because the beginner becomes discouraged, he or she will give up on learning fairly quickly. The resale value of a cheap guitar is next to nothing – maybe fetching $25 at a garage sale.
On the other hand purchasing a QUALITY, but fairly inexpensive guitar has the opposite results. There are two reasons why this type of guitar should be considered: 1) it is usually easy to play and can sound quite good. This encourages the beginner (especially younger beginners) and helps them want to practice more and make quicker progress; 2) if the player should want to sell the guitar, it will have fairly good re-sale or trade-in value. Often guitars can retain 75% of their original cost after many years of ownership. Some quality guitars actually appreciate over time and make for a great investment.