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You don't have to "settle" for classics and "old" books if you need free ones either.
Yoyo didn't list a country but in the US many libraries seem to be getting some digital collections going so you can go that route. Or you can keep an eye on Kindle free offers (keep an eye in the deals forum basically) and many first books in a series are "perma-free". Or there are some contemporary authors who have some books for free, Down and Out in the Magic Kingdom by Cory Doctorow or The Rebirth of Pan by Jo Walton come to mind.
Tor's book club might also be a good option, they say they are restarting in January and at least in the first go-around they gave away a free book every month; there were some good books there from David Weber, Jacqueline Carey, Gene Wolfe, and others.
There are lots of ways to get good free books.
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