The clothes we have for LO is about 50% new and 50% used I bought at the salvation army and the goodwill. Im picky about the used stuff I buy for my kids. I buy my daughter used clothes when i find cute ones, so hers are about 50% new and 50% used. My son however, is harder to find him good quality used clothes (hes almost 9) as at that age, they seem to really wear them out. LOL. So, his are pretty much 100% new, but I did save all of the good stuff for LO (but only started saving at 3-4T and we're up to size 10 now.
If it has no stains or rips and is in good condition, I'll use it. If it has stains however, I wont. Even when my kids stain their clothes, they go in the bin of outside play clothes and not everyday clothes. So if it were me, i wouldnt use the stained up ones, but thats just me. I sell a lot of used clothes online, and i wont sell anything that has rips or stains because I know I wouldnt want my kids wearing them. Those clothes usually get donated to the goodwill or salvation army.