[Elspode]

Speaking from my perspective of 40 years of guitar playing/owning, most of them cheap ones, I can say definitively that cheap guitars have *never* been better than they are right now in terms of fit, finish, sound and playability. The difference between a $200 MexiStrat and a $1,000 American Strat is really pretty damn negligible these days. Mostly, I find that difference to rest with the electronics, rather than the actual body/neck/hardware on the instrument itself.

If you want to go a step up from a Squier, and still be economical (if indeed he is insisting on electric over acoustic), a Mexican Made Stratocaster will be playable for a long, long time, he won't feel like he's playing crap and when he gets older and has money of his own, he can step up to the "real thing".

Acoustic guitars are also at their highest quality vs price mark in my lifetime, and Dean makes some very attractive models, both in terms of price and appearance...and they sound nice. Washburn is another manufacturer whose low end products are outstanding.