Look for used stuff on craigslist - search HO scale and you should be able to find something. Seems like there are tons of people out there that get train sets as a gift, then lose interest (or their kids lose interest.)
Stick with cheaper stuff for an 8 year old - I guarantee he'll break some of it. If you start with used/cheaper stuff you won't get bothered by the damage as much.
My 6 year old has a bunch of cars I let him "play" with on EZ track on the floor, but when we run the layout - Dad's nice cars stay on the track.