Why You Should Take Out a Loan to Buy a Guitar | Hub Guitar

Why You Should Take Out a Loan to Buy a Guitar

This guide mostly deals specifically with acoustic steel-string guitars, although much of what is written here applies to electric guitars as well.

Most Desirable Acoustic Guitar Features

When shopping for an acoustic guitar, there are a number of features to look for, but features add cost. Here are a few desirable features of acoustic guitars:

Feature Importance Level Est. Added Cost
All Solid Wood“All solid wood” means the top, back and sides are each made from single-layer wood. While guitar tops are usually solid wood, many use laminated wood or artificial materials for the back and sides. This is strictly to avoid the expensive and time-consuming process of bending and steaming the wood to the contoured shape. How to tell? Assume the back and sides are not solid unless it says, “Back and Sides: Solid.” Very High $300
Wood SeasoningAn important step sometimes neglected on cheaper instruments. A master builder will choose the best wood, and insist that it has been seasoned properly before building. Seasoned wood has been aged and dehydrated before use, so that it will be more stable over time and less sensitive to changes in heat and humidity. High $200
Made in North AmericaPatriotism aside, most of the world’s best guitars are made in North America. Guitar building is as American as Apple Pie. In addition to the expectation of the finest quality and craftsmanship, guitars produced locally may also be less susceptible seasonal shifts. High $200
Cutaway ShapeThe cutaway shape allows easier access to the upper frets. It’s very useful for playing lead. If you might want to get a cutaway, you should make sure to buy a guitar that has one because it certainly can’t be added after the fact. Medium $100
Bone Nut/SaddleBone is still the high-end choice for crafting nuts and saddles, valued for it’s tone and durability. Some builders use artificial bone, but this is to save time and cost on manufacturing. Bone has to be fashioned by hand. However, it’s not a crucial feature because you can always have any luthier make a bone nut/saddle for you later and retrofit your guitar. Low $50
Pickup SystemPickup systems can cost the manufacturer anywhere from $10-20 all the way to well over $100. It’s a great feature to have ready-to-go but you can add a pickup to any guitar after the fact. These add substantially to the cost because the manufacturer can’t produce it themselves, normally, and must buy it from another company. Low $75
Brand Name Tuning MachinesAn increasingly rare sight on affordable guitars, brand name tuning machines are a mark of high quality. But because the builder must pay nearly full price for them, it’s a costly feature to add, especially since the guitar builder will want to add in a little bit of extra markup. Low $75
Total: $1000

These cost estimates are purely hypothetical, but we can imagine that if we require all of these features, we’ll add $1000 to the cost of the instrument. That’s before the base cost of the instrument. In addition, the guitar manufacturer will want to earn a substantial profit for adding each of these items. These are estimates of the cost to produce, not the cost to the you who buys the instrument.

Although there are so many guitars mass-manufactured every day in high-paced foreign factories, it’s difficult to find an excellent quality guitar for less than $500—and even then, you’ll be compromising on many of these features.

Your First Guitar

Usually when people shop for the first guitar, they are trying to find a way to avoid spending money as much as possible. This sometimes leads people to purchase “instruments” barely deserving of the title—sometimes even objects that resemble instruments but lack their basic functions.

Newcomers should budget carefully

From a personal finance perspective, it is wise to avoid spending too much money on your first guitar. After all, you aren’t sure that you will like to play the guitar or that you will make use of it regularly. You might decide in just a few weeks to give up on this hobby and move on to another one. From this perspective, it makes sense to limit your budget to a certain extent. But, even in this case, you owe it to yourself to try to learn guitar using a real instrument and not a toy. If possible, you should plan on spending at least $300-$500. This is the price range where you start to find quality instruments suitable for adult learners. Instruments for children tend to be smaller (and cheaper) and a quality one might be found for around $200-$300.

A quality instrument, if properly cared for, can last for a lifetime—and even be passed on to a new generation.

If you need to sell it later

If you’re worried about being able to sell the instrument off later, make sure to buy a good brand that will retain its value. Brands with a reputation for quality are able to protect the value of their instruments further into the future.

Players with experience should have a nice instrument

If you have been playing guitar for more than a year and you expect yourself to continue doing so indefinitely, then you owe it to yourself to acquire a truly fine instrument, if that’s possible.

In any case, the results from learning the guitar will be proportionate to the amount of time you spend on your practice, as well as the amount of money you spend on acquiring a quality instrument. The quality of the instrument will matter more as you progress, but even on Day 1 it is a significant factor. Understanding the different price points for guitars, and understanding what you get as you pay more and what you give up as you pay less will help you to make a smart decision about your purchase.

Guitars Under $300: Avoid

Guitars Under $100

It is not recommended to buy a guitar that costs less than $100. These instruments will have noticeable differences in quality both in terms of their workmanship and the materials used to construct them. They are sometimes a serviceable and temporary instrument for total beginners or children. But they will quickly be outgrown—if they don’t fall apart first—and good luck selling it later.

Guitars Under $200

It is uncommon to find a quality learner instrument in this price range. If you do, it will likely be at the very top of the price range, at $200. However, if you choose carefully you may find an instrument in this price range that is serviceable for your first few months of learning. Know that if you buy a guitar in this price range, you will want a better one later—and when you sell this guitar you may not recover much of the cost.

Guitars Under $300

Guitars under $300 will likely be constructed using laminate materials, false woods, and plastics. These are not necessarily bad things, if engineered properly of course these materials can be suitable for building instruments. But in this price range, you are likely to see poor quality materials and poor craftsmanship.

Remember: to save on cost, something must be sacrificed.

Guitars $400 And Up: Quality Learner Instruments

Guitars Ranging from $400-$600

This price range probably represents the low-end of the “sweet spot” in buying a guitar for a learner. The guitar will likely be of high enough quality that you can learn to play it easily enough. You will have to make sacrifices either in terms of the craftsmanship, or the materials. Guitars made of good quality materials are often suffering in craftsmanship at this price point. And guitars with excellent craftsmanship are often created that way using sophisticated manufacturing methods, and as a compromise they are often built with lower quality materials.

You would be hard pressed to find a guitar in this price point with all solid wood construction, North-America made. But the Recording King RO-T16[?]Affiliate Link is an imported guitar of excellent quality, made of all solid wood.

Guitars ranging from $600 to $1000

When we look at this price range we often see guitars that are similar to cheaper guitars, with a few extra features and “eye candy”. The fundamental quality level is often no different. Know what you’re paying for! The last thing you need is $300 of eye candy.

One notable exception is Seagull Guitars. The Seagull Maritime [?]Affiliate Link compares excellently to other guitars in this price range. It is all solid wood, and has excellent North American craftsmanship. It is somewhat light on other features, but those two alone make it a steal.

Guitars $1200 and Up: Finer Instruments

Guitars Between $1200 and $1800

In terms of buying a quality instrument suited to a lifetime of learning, or to professional use, this price range is perhaps the most attractive. At this price range one begins to find guitars that are constructed entirely of solid wood, whose craftsmanship is top notch, that are built in the North Americas.

At this price range, you can win big by getting a guitar that’s made of excellent properly-seasoned solid wood and has wonderful craftsmanship—with no other big features. You can always upgrade tuners, nut/saddle and pickup later.

A very attractive and award-winning instrument in this price range is the Breedlove Oregon Concert[?]Affiliate Link.

Guitars Above $2000

As you go up in price, a few things happen. Of course you get extra features and add-ons such as high-quality brand-name tuners, high-quality hardware, high-quality bone nut and saddle, high-quality amplification system. While these things are all good, many of them can be added later.

As you go above the $2000 price range, you will notice that the factors differentiating these guitars from the previous price tier are less substantial. You will find rare woods such as the now-banned Brazilian Rosewood. You will see gorgeous inlays, beautiful bindings and purflings, and other kinds of eye candy that enhance the instrument’s appeal but don’t fundamentally change its playability or sound in a measurable way.

In other words, we are starting to pass the point of diminishing returns. Exclusive features, beautiful appointments, and, of course, high profits.

Guitars Over $5000: Handcrafted Masterpieces

There are still master luthiers making fine hand-crafted guitars, and they don’t have access to the cost-saving and profit-maximizing techniques a factory operation has. A private individual building guitars by hand can’t put food on the table at just $2000 or $3000 a pop. Expect to pay at least $5000 for most hand-crafted guitars from small builders.

If you just want to be a good guitar player, even a professional, you do not need a heirloom piece handcrafted by one of the living masters, but bless you if you can get your hands on one.

Another reason you'd look in this price range is to get custom work done. An experienced guitar player may develop very specific requirements for their instrument and require a custom ordered-guitar. This can get quite expensive, because all of the economies of scale used in manufacturing are now gone. Mass-production is cheap; individual attention costs money.

Determining Your Price Point

If you care about the guitar, and expect to play for the rest of your life, and you you do not have a quality instrument yet, you should plan on spending $1500 or more to get one. But for many people, that’s an enormous sum. So what to do?

The answer is simple: you should take out a loan.

Normally, debt is bad. Using loans to finance improvements in your lifestyle that you cannot yet afford is unwise.

But sometimes it makes sense to borrow. A loan makes sense when you are going to use the borrowed money to purchase an asset that will serve you over the course of many years. From an accounting perspective, it does not make much sense to buy something out of pocket and suffer all of the costs all at once. If you expect to accrue benefits from an asset over the course of many years, it’s also better if you can divide the cost of the asset over the years you will use it.

How many hours of pleasure will the instrument bring?

It’s often said that mastery takes 10,000 hours. If you can get 10,000 hours out of a $1500 guitar, you’ll end up with the incredible bargain of just $0.15 per hour!

The cost of maintenance

If you’re serious about playing guitar, you’ll also need to change strings, get the guitar set up, and sometimes have more serious work done on the instrument. Nobody would want to spend $200 refretting a $300 guitar. But if own a truly high-quality instrument, the cost is worth it.


A quality instrument will last you for your whole lifetime, and give you the pleasure of daily use for decades to come—and can even be passed on to new generations. If you’re serious about learning guitar, you should get one that you will really enjoy playing for many years.

And take good care of it!

As the creator of Hub Guitar, Grey has compiled hundreds of guitar lessons, written several books, and filmed hundreds of video lessons. He teaches private lessons in his Boston studio, as well as via video chat through TakeLessons.

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