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Choosing a guitar...

I avoid recommending specific guitars for others to buy however I am happy to give an opinion based on my experience.  If someone asks me, "Is this a good guitar?", I'll say what I think of it but if they ask "Shall I buy this guitar?" the answer is always "That's for you to decide."  Choosing the right guitar depends on a variety of factors including personal taste.

One of the most important things to understand is the type of guitar needed.  Will it be suitable for the person who is going to play it?  There is no point a person with small hands buying a full-sized concert guitar when they might be better off with a three quarter sized instrument.  Some people don't have hands that are large enough to cope with the demands of a full scale instrument and will most probably want to consider a guitar with a shorter string length.  A person might have a dream to play a specific make of guitar and be determined to own one regardless of such technical obstacles but personally I think the better approach is to find a guitar that is right for you.

The width of the guitar neck is another factor along with the string spacing across the fretboard.  It pays to check and ensure that the fretboard and string setup is going to be suitable for the size of your hands.  This can be difficult to judge if you are just getting started and, if in doubt, it is worth seeking advice from a reputable classical guitar teacher when considering any guitar.

It's also important to be able to distinguish between classical and other types of guitar, such as steel string acoustic folk and jazz guitars.  They are built to quite different specifications and a classical guitar uses nylon strings that help produce the all-important classical guitar sound.

The most expensive guitar available isn't necessarily the best guitar for you.  Only when you have developed a solid playing technique can you expect to get the best from any guitar.  A really good player can make a cheap guitar sound great and an expensive one sound stunningly beautiful.  If you are a beginner, and not exceptionally wealthy, it pays to start with an inexpensive student guitar, that should be more than adequate when getting started.  When looking at cheaper guitars, be sure that you are looking at real guitars made from wood and not toy guitars intended for children to play with.

The quality of instruments available at low to moderate prices is quite surprising but does vary.  I consider NZ$250 to NZ$500 to be a low price for a guitar - although some 10 years or so ago I paid about NZ$100 for a brand new, factory-made student guitar that sounded surprisingly good!  Top end student guitars can be $1500 to $2500 and hand made concert guitars many more (sometimes tens of) thousands of dollars.

Second hand guitars, if in good condition and properly cared for, are another viable and affordable options for beginners.  Again, knowing what to look for is a key factor.

Problems to watch out for and avoid include:
1. Guitars with a bent or warped neck.
2. Large cracks in the sound board or back and sides of the guitar's body.  Depending on where the crack is and how large, it might be fixable however as a general rule it is best to avoid guitars with cracked wood altogether.
3. Check the area of wood (part of the sound board) between the bridge and the edge of the sound hole.  If the soundboard appears sunken (a slight dip or concave area) there is most likely to be a structural problem inside the guitar.
4. Check the fret wire.  How worn is it?  The frets should not be worn down to the level of the fretboard wood.  Frets can be replaced by a guitar repairer and is worth doing if the guitar is valuable but is otherwise an unnecessary expense.
5. Is the fret board painted with black lacquer paint or is it real ebony or rosewood?  Real wood is preferable.
6. Check that there is nothing loose, such as bracing struts, inside the guitar.  If in doubt, ask an instrument maker or repairer for advice.

Things to look for but do not present a serious problem:
1. Don't worry about minor surface scratches as they can usually be repaired or just accepted as part of the instrument's history. 
2. Broken machine heads (the things used to tighten and tune the strings) are usually of a standard design and easily replaced.  Rare, antique machine heads are not easily replaced and replicas can be very expensive.
3. Broken strings are easily replaced.

If you're not a proficient player yourself, it can be helpful to ask an experienced player to play the guitar so you can get an impression of the sound.  On the other hand, different players can produce different sounds from the same guitar and in that respect things can become confusing.  Most importantly you should be happy that you are comfortable with the guitar and that you like the sound it makes when you are playing it.