The quality of your new or used cello could have a significant effect on your playing, as poor cellos will never produce a good sound. The best cellos come from recognizable name brands, aren't cracked or warped, and have a relatively thin level of smooth varnish. The wood should have extensive flaming, a horizontal band that indicates high quality wood, as well as a tight grain at the center. Look for instruments with real ebony fingerboards, inlaid purfling near the top of the instrument, and a relatively flat arch. When played, the best cello will provide good volume, as well as a rich, mellow sound.
An inexpensive cello may be tempting, but most cheap instruments don't have the quality materials and construction needed to produce a good sound. They may be quiet, nasal, or thready sounding, and students who use these inferior instruments will have to struggle with their tools to produce good music. Even a quality cello that has been handled poorly can cause problems, since its tone changes from day to day. Avoid bargain hunting and choose a cello that will make it easier to produce beautiful music.
Cellos from known name brands are the best option instead of generic manufacturers, but don't rely too heavily on the labeling, as some older cellos may be deliberately or accidentally mislabeled. A cello that has seen some use will cost less than a brand new one, and usually has a more mature voice, but you should avoid instruments with visible cracking, especially along the ribs or neck. Damaged instruments shrink and swell in relation to the weather, and may change their sound unexpectedly.
The best cello will have a smooth layer of rich varnish that's not too thick, since heavy varnish can actually dampen the sound of the instrument. Under the varnish, it should have a horizontal bar of contrasting dark and light wood, called the flame or flaming. In instruments made from very high quality wood, this bar is strongly pronounced, with an iridescent sheen that causes the colors to shift as the instrument is moved. Some cheap cellos have artificially-produced flames, but these lack the shifting quality of the real thing.
A good cello is made of wood with a tight grain towards the center of the instrument and under the bridge and fingerboard, and a looser grain towards the edges. The fingerboard itself should be very close-grained ebony, not a looser-grained wood with paint applied. The decoration, or purfling, around the top and back edges of the cello should be inlaid rather than painted, as this keeps the instrument from cracking if accidentally struck. The arch across the instrument should be a low bow that produces a mellow sound, rather than a high arch, which may cause the cello to sound nasal.
You should ask to play any instrument that you're thinking about buying. The best cello for most needs will be quite loud and capable of competing with other instruments. It should also have a sweet, even tone with good depth. Avoid dull or shrill-sounding instruments, and don't assume that the cello will improve over time if it doesn't sound good in the beginning.