Where should you go to purchase your stringed enjoyment?
Pawn Shops
Sometimes, pawn shops will have guitars that look and sound great for $100. This would be a rare find. More often, though, you'll find a mediocre guitar for that price, and that's still pretty hard to beat. Just don't pay more than $150 at a pawn shop, just in case you do happen to get screwed.
Mail-Order Catalogs/Online
Buying your guitar through the mail or online is a good option, because there are always tons of deals being offered that can save you a lot of money. However, this is an extremely dangerous option if you're getting your first guitar: How will you know if you're getting ripped off? Fortunately, there' a solution: Go to your local music store, find one you like, tell the salesperson you'll "think about it," then go online and look for a better deal on that exact model.
Local Guitar Store or Chain
Heading out to your local music store or chain is the optimal way to purchase a guitar. Though this is the most expensive option, you will most likely get the best warranty and best service. And you'll actually get to test-play the guitar. If you like it a lot, you can take that exact guitar home with you. This is not to say that the local store or chain does not have its faults. Sales reps tend to be a bit pushy when it comes to selling a guitar. Don't let them talk you into getting a more expensive guitar than you really need.