I would check out a garage sale/craigslist/kajijii etc.
Wait to spend more money on a bike until he's older & will actually notice the difference. He's going to keep growing & you're going to have to keep replacing bikes - likely once a year.
He's going to LOVE riding with you no matter what bike he has. If you want to make it more special - take him shopping & let him pick out a horn/bell & some other accessories for it.