I would humbly recommend a Classical guitar for any beginner. After a year or so of dedicated practice, the transition to steel is a breeze. I tried learning on a couple of (really) cheap steel strings when I was a kid and the pain of the high action and rusty Black Diamond strings, not to mention horrible tone, was less than inspiring. I eventually saved up and bought a Gibson classical, (oddly enough, because I mistook Ian Andersons' slotted headstock 0-16NY for a classical and was inspired by his playing). This was the ticket for me as the painlessness, wider neck and inexpensively acquired decent tone, helped me to stick with it.
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