Why Are Honda Civics So Expensive? 10 REASONS WHY

Honda Civics are expensive because of industry-wide price inflation, higher production costs for in-demand features and technology, and car companies diluting trims and capturing bigger profits in an unfavorable economic climate.

Honda Civics have been a popular, reliable, and affordable compact car for decades. But lately, prices for even basic new Civic models have crept up into premium territory. What gives? Why have Civics gotten so dang expensive? I’ll walk through the top 10 reasons behind the rising costs.

First, A Bit of Background Civics have always stood for sensible, no-frills transportation. They’re practical cars focused on good gas mileage and low maintenance. In the past, you could grab a brand new Civic for around $15,000 pretty easily. But now, you’ll struggle to find one under $25,000! The cheap and cheerful Civic seems to be fading away.

Top 10 Reasons Why Are Honda Civics So Expensive

1. General Auto Industry Price Creep

Across all car segments, vehicles have gotten steadily more expensive in the last decade. The average price paid for new cars is up nearly 40% since 2013. Customers expect more tech features and higher build quality – things that raise manufacturing costs. Automakers pass these costs to buyers through higher prices.

2. Higher Consumer Demand

Civics remain a top choice for many car shoppers focused on affordability and reliability. Strong demand allows dealers to attach premiums onto the MSRP. When cars sell like hotcakes, why discount them? High demand enables automakers to capture more profit while customers clamor for inventory.

3. More Standard Features Today’s

Civics roll off the line loaded up with features that used to be optional upgrades – things like touchscreens, WiFi hotspots, lane assist tech, etc. These raise the baseline price, though they also add more value for buyers. You’re getting more car for your money.

4. Materials and Technology Costs

Key components that go into cars like computer chips, steel, sensors, and more have had prices increased substantially in recent years. Automakers have to pad MSRPs to maintain margins on tech-heavy vehicles. Civics have lots of computers and complexity these days.

5. Tighter Profit Margins

Economic uncertainty pressures automakers to capture larger profits on the cars they do sell. As overall sales drop, car companies must make more off each unit to please shareholders. They’ve strategically positioned Civics as a premium compact to milk better margins from buyers.

6. Switch to Turbo Engines Many

Civic trims now have turbocharged engines instead of the old natural aspiration powertrains. These punchier turbo motors boost performance and MPGs. But they also increase manufacturing complexity significantly – which gets passed to customers via higher asking prices.

7. Higher Interest Rates

To purchase cars, most buyers take out auto loans. And as you may have noticed, interest rates have risen substantially on loans/debt recently. That means higher monthly payments and more overall costs for people financing Civics over 5-6 years.

8. Packaging Changes

If you peruse Civic trim levels, you’ll notice key features got shifted from lower to higher packages. For example – a telescoping steering wheel, folding rear seats, adjustable front headrests, and floor mats now require pricier trims. Brand dilution pushes buyers to spend more.

9. Record Dealer Profits

Thanks to inventory shortages and backlogged demand, dealers make more money off each car they sell nowadays. They can tack on “market value adjustments” without losing business. Customers have few alternatives but to pay inflated prices for new and used cars.

10. Lower Incentives/Discounts

Automakers don’t have to work as hard nowadays promoting sales using rebates, cut-rate financing, and other incentives. In times of low supply, buyers hunt out available inventory rather than requiring coaxing via discounts. Less incentives equals more net profit per car.

FAQS.