Is he also trying to get an amp in that $250?
Clive has a good idea in going used, sometimes you can get great deals. I once got an American made Peavey Fretless bass for $125, barely played because the guy wanted the money and never figured out how to play it. Another thing is pawn shops will often lower their asking price for stuff if you have hard cash in your hands. I have seen guitars they are asking $300 for, go for $175 - $200 when cash is presented. The thing you have to watch out for in either of these cases is that the guitar is in tune and the neck hasn't warped, so make sure he test drives them right there. The other thing is make sure your not getting ripped off by buying a mexican, chinese, taiwan, or korean model of a "brand name" guitar for $250 used, because you can get them for new for less at music stores.
If you go to the music store they often have deals where for $200 you can get a Squier Strat or some comparable guitar AND a small practice amp. Sometimes for a little more, sometimes for a little less. The thing with these guitars is they are all made from the places mentioned above and the quality just is not there. They don't sound as good, they don't feel as good, and they don't play as good as their american made versions. But at $400 less than the american models they can be great for beginners. He would probably outgrow the guitar and want a better sounding one within a year or two if he sticks with it. You can get effect boxes and stuff to try to make them sound better but you know the old expression...you put makeup on a pig and it's still a pig. Also the re-sale value on these cheaper guitars is horrible unless you find someone who doesn't know any better.
If it were me looking long term I would patiently keep my eyes out for a used american made guitar. I think long term you kid would be happier. But if you need the amp thrown in the package and having a new guitar is important to him, then those cheaper packages may be the way to go. Good Luck.
