How flat/hilly is the ride? Go single speed. I commute on a $325 (new from PBS) single speed, and love it. Granted, I've spent a little extra money to buy an ENO freewheel, and put fenders and all the normal commuting accutriments on it, but you can go a lot cheaper with a used bike. There are a number of good commuter bikes in that price range. You're better off posting your question in the commuter forum, as opposed to here in General.
And don't rule out a 29er rigid MTB with slick tires.
Check out your local Performance bike shop. With coupons and the club points, you can end up with a Scattante with Shimano 105 for about $650-700 if you find a left over 07. They are great bikes for the money.
Entry level road bikes start in the $900 to $1200 range.
But that's walking out the door with a bike money.
Do you have pedals and shoes, tools and pump...
The need/want list seems to be never ending and the cost accumulate well beyond the initial purchase of the bike.
If this bike is for commuting, why road bike?
Lots of road bikers have fixed/singe speed bikes for commuting.
In the $500-$600 range there are some very cool bikes.
You may want to check that forum.
Besides, with a fixie you'll get instant hipster status.
If the roads you're going to ride on are in great shape, then look into a road bike. If you are going to be riding on a mixture of sidewalks, over potholes, and uneven surfaces, I'd prolly lean toward a hybrid MTB with road tires. The take a little more beating than a road bike.
I was in your position about a year ago. There are several options within you budget, but as many have said before what do you want out of the bike? Have you ridden a true road bike that fits you? If you haven't they are not the same as a hybrid in terms of position and to a certain extent, comfort. Stay away from single speed fixed bikes unless you know that is what you want... I can't imagine riding one in a hilly area unless I was totally committed to the zen of SS. Anyway, if a road bike is what you want, in the $5-600 range there are many nice options. Bikesdirect.com, Performance's Scattante, and Iron Horse are all decent bikes for the money, as said above. They will be heavier than a $1000 bike for sure and have more beginner oriented components, but will serve you well. As an example, the Scattante R-330 is about $600 and is Sora equipped (the shifters, brakes, etc). For about the same money you can get a Felt Z100, which will have a little lower class of gear on it, but a name band for $600. These are all new options. See the next paragraph for my suggestion.
Used bikes are the best bet unless you are quite sure you want to invest for the long haul. A year ago I paid $400 for a Motobecane (bikesdirect brand) bike with full Ultegra gear (second from top of the line). I am sure I can sell that bike for $400 any time I would want to. I cut my teeth on that bike then moved up to a nice Italian steel bike, again used. I paid 25% of the frames retail on ebay. You just can't ignore the power of craigslist or ebay for getting the best bang for your buck. The nice thing about ebay is most people are expecting to ship, so unless they have concerns about Canada you'll be set. Be aware that many bikes sell for way too close to new shop prices. Do your homework and you will find a nice deal. There are even some previous year models on ebay that are BNIB.
Entry-level hybrid bikes are more in your price range than entry-level road bikes. For what you plan to do, a hybrid sounds perfect.
Walk into the nearest bike shop, tell them your budget and what you plan to do with it, and have them show you what they've got. It's probably the best way to go for somebody with limited biking experience and knowledge.
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