I bought my daughter a Trek 7000, one slot below the 7100. We haven't had any problems at all. The 7000 is more like the FX series than the 7100 and above, in that it has a fixed fork. Is it a great bike? Of course not, the welds are functional but fugly, the drivetrain is SRAM grip shifters with some sub-Sora Shimano rear derailler. But, it is a solid bike that is fine for her purposes. She is not now and will never be an everyday rider, it is just for riding with friends when the mood hits them. On the other hand, it is better bike overall than the bikes I road to school everyday when I was a kid in the 60s, and wouldn't be a bad commuter.
So, should you buy used or buy a new low-end Trek or Giant? Depends on what kind of bike you want, and whether you can do your own wrenching. You won't get even an entry level race bike new for under $400, but you can certainly get a new, reasonably decent entry level upright bike that will get you from point A to point B for under $400.