There comes a time in every student's musical journey where they will need to consider upgrading their instrument. Whether that is for ergonomic reasons (size upgrade) or for artistic reasons (lack of color & timbre), it can be an extremely confusing process for all involved.
Ergonomic upgrades are fairly straightforward; if a student is ready for the next size, one simply needs to obtain that size. Usually, the larger instrument will naturally have more power and richness, just due to the larger resonating body. However, if the student is starting to reach the upper limit of what their current instrument is able to do, then an upgrade in quality is required.
Like many things, the rise in quality and cost tend to go hand-in-hand, up to a point. Instruments can easily go from players' instruments (ones which scale in tonal beauty as cost goes up) to investors' instruments (ones whose value may appreciate with cost, but not necessarily show linear appreciation in tonal beauty) as it crosses a specific price threshold.
First, determine your needs: Do you want this instrument to last for several years of progress? Or do you want to be purchasing another upgrade within the next two years? Does the company you purchase from allow for trade-ins or upgrades against your current instrument?
Next, determine your price range. This is where it can get tricky. You can literally buy a violin off Amazon for $60, but when you factor in how many problems it would have that would need to be corrected to make it playable, it would cost over $1,500 in repairs.
What you are paying for in an instrument is skilled craftsmanship and the age and quality of tone wood and fittings. A poorly carved bridge or nut can make a professional sound like they are just beginning, and wood that is not properly aged and dried can later develop cracks or seam openings. So, when you see an inexpensive instrument, keep in mind what problems you may encounter later down the road of ownership.
A seasoned professional will be able to tell if the asking price of an instrument is fair, but to most students seeking an upgrade, anything will sound better than what they are currently playing. Always look for objective feedback, whether that's your teacher's opinion, or simply video recording you playing the instrument. A good sign that a shop is reputable is that they will allow for instrument trials so you can play the instrument for a week and get outside opinions.