Why Are Hatchbacks More Expensive Than Sedans?

Grey Volkwagen Golf GTI 2022 outside near the forest in a parking lot

I’ve always been a huge fan of hatchbacks. Since I was young, I would watch rally races and I quickly fell in love with the body style and look of a Hot Hatch going around the track. Once I grew up and started searching the market for a hatchback, I quickly realized that they were more expensive than sedans.

It all boils down to supply and demand. Manufacturers sell and make fewer hatchbacks than sedans. That means that they need to charge more to cover their costs and make up for the operational costs. At the same time, buyers are willing to spend more for a rarer vehicle type. When you combine the two factors, you’re left with hatchbacks being more expensive, and buyers having no issue paying more.

It seems like such a strange concept. Why are hatchbacks more expensive than sedans, since they’re both so similar? In this quick guide, I’ll explain everything you need to know.

What’s a Sedan?

If you didn’t know, a sedan is a style of car. It has four doors, a separate compartment for a trunk, and an area in the front for an engine. If you think about a standard Civic or Camry, you’re picturing a sedan already.

Toyota Camry 2022 black sedan
2022 Toyota Camry

In the American market, sedans are the top-selling car style out of every option. You can check that fact for yourself by driving down your local highway. You’ll likely see way more sedans than hatchbacks unless you stumbled into a rally track, where hatchbacks are the preferred style.

If you change the trunk, the number of doors, or the size of the vehicle, it’s suddenly not a sedan.

What Is a Hatchback?

A hatchback differs from a sedan in one major way: instead of a separate trunk compartment, the hatchback’s cargo area is accessible from the cabin. A passenger can reach back and access the trunk without getting out of the car.

This is possible by adding a fifth door to the rear of the car. The hatchback’s trunk opens on a hinged door in the back, sort of like an SUV’s or minivan’s trunk.

Mazda 3 2019 red hatchback rear view
2019 Mazda 3 – Hatchback

This change also changes the overall styling and size of the vehicle. In general, hatchbacks are a bit smaller than sedans. Their body has a more gradual sweep along the roofline since it doesn’t have to dip down to accommodate a separate trunk.

As far as the drivetrain, performance, comfort, and safety — there aren’t any notable differences between sedans and hatchbacks. In fact, a lot of car manufacturers will offer the exact same car as either a sedan or hatchback. Under the hood, everything is identical. The only differences can be found in that trunk area.

The Price Difference Between Hatchbacks and Sedans

The price difference between hatchbacks and sedans can be a little startling. Start on Toyota’s site and go through the options to build your own Corolla. You’ll notice a $1,000 price bump if you swap from a sedan to a hatchback.

The same story is true on Honda’s site — you’ll have to pay another $1,000 if you want a hatchback Civic.

Honda Civic 2017 hatchback white in Los Angeles, USA
2017 Honda Civic – Hatchback

For a used BMW, the difference gets even bigger. I found identical sedans that were $5,000 less than the hatchback version of the same 3-series.

To put it simply, hatchbacks can be thousands of dollars more for almost the exact same car. The only difference is the styling and trunk. This begs the question: why are hatchbacks more expensive than sedans?

Why Are Hatchbacks More Expensive Than Sedans?

Surprisingly enough, the answer revolves around a single concept: supply and demand. Sedans outsell hatchbacks by orders of magnitude in the American market. That means that sedan manufacturers need to be more competitive with their pricing, and they can afford to sell them at a lower price from a production standpoint.

Hatchbacks, on the other hand, don’t have that same luxury. Since fewer are sold, the margins are a lot tighter. It means that manufacturers need to up the price to make up for their costs.

Let me explain the idea through an over-simplified model. Imagine it costs $100 to build a car factory, and each car costs $1 to build. If you think you’ll sell 100 cars, then pricing them at $2 per car will cover all of your costs and get you a nice profit.

If you think you’ll only sell 10 cars, then you’ll need to up the price of each car to something above $11 just to cover your costs.

Two VW Volkswagen GTI hatchbacks parked outside a car dealership on a bright sunny day

This model roughly translates to why hatchbacks are more expensive. Fewer are sold, but they cost about the same to produce.

The other effect of supply and demand is that buyers are more willing to pay more since there’s a smaller supply. People who love hatchbacks will notice that there are fewer options on the market. Then, they’ll be willing to spend a few thousand dollars extra in order to get the perfect car for themselves.

It feels like a scam, but it’s just the result of the economy of hatchbacks.

What About Converting a Sedan to a Hatchback?

One of my buddies recently said that he wanted to convert his sedan into a hatchback. His reasoning was that he always wanted a hatchback and he was upset that Toyota didn’t offer a hatchback option for the Camry that he recently bought.

After a tough conversation, I finally helped him to understand that you really can’t convert a sedan to a hatchback.

The biggest obstacle is all the bodywork and framework that goes into the conversion. Cars don’t use the same framework as trucks or SUVs. The body is part of the frame and they work together to make the exoskeleton of your car.

Hatchback car chassis stripped to bare on a wheel car at an auto body workshop

Even with welding capabilities, it would cost so much money and time just to put the fifth door on a sedan.

Next up, you have to figure out how to extend the trunk and source a fifth door. In other words, you would have to start by finding a hatchback’s trunk at a local junkyard and then make your designs around that. Creating a new trunk is expensive, really hard to do, and even harder to make it look seamless and attractive from the outside.

The bottom line is that it’s not even worth it to try to convert a sedan to a hatchback. It will cost you way too much money, waste a lot of time, and you’ll have a car that isn’t safe and might not even pass inspection thanks to the modification.

You’ll have to either buy a hatchback or hang a poster of a hatchback on your wall to stare at.

Are Hatchbacks Worth the Extra Thousands?

Now I want to talk to the people whose jaws just dropped. It might seem insane to pay thousands of dollars more for the exact same vehicle. Why do people do it? I can think of a few major reasons.

The Styling Is Incredible

Maybe this is a subjective take, but I think the styling of a hatchback is way better than a sedan. From the exterior, the slowly sloping lines are a lot more appealing to look at. From the inside, seeing the extra space behind your head makes everything feel more open and comfortable.

Some of my favorite cars to look at are hatchbacks, so I’ve always had a soft spot for them.

Of course, better styling is always worth extra money. This is why Porsches look so great and most Kias don’t (sorry, Kia drivers. I’ll make it up to you later in this article).

It’s an Affordable, Unique Vehicle

Another thing to mention is that people typically like to drive unique vehicles. Super expensive hypercars can cost more than a million dollars, and they look incredibly unique. A lot of people want to turn heads as they drive down the road, and they want to impress people with how nice their car looks from the outside.

Honda Civic 2018 Hatchback red in Geneva, Switzerland
2018 Honda Civic – hatchback

The difference is that you can get a unique-looking vehicle in a hatchback without spending hundreds of thousands of dollars extra. To be honest, even a hatchback Civic is a bit of a head-turner if one passes me on the road.

To put it simply, hatchbacks are a cool alternative to sports cars or supercars. You get a nice level of uniqueness without having to break the bank. This is another reason why I think hatchbacks are worth the extra thousand or so.

There’s a Hatchback Culture

You might not realize it, but there’s a culture of people who own and love hatchbacks. The same is true for truck owners, Jeep drivers, and bikers. I have some friends that will only ever buy hatchbacks, and they love talking about their hatchbacks.

Close up of a smartphone with all the social media apps visible

Once you buy one, you can join a group of people who are equally passionate about what they drive. They are forums dedicated to hatchbacks, Facebook groups just for fans, and I even have a local auto hobby shop that primarily works on hatches. Needless to say, you’ll find more people that share your interest once you buy one.

Is it worth spending some extra money if it means getting into a specialized club? Probably not. The good news is that you don’t need to buy one to interact with these different groups — but they’ll probably further convince you to spend the extra and get a hatchback of your own.

Hot Hatches are Among the Most Fun to Drive

Certain cars are only offered as a hatchback, and they’re among the most fun cars to drive on a budget. I’m thinking specifically about the Hyundai Veloster, Ford Focus ST, and the VW Golf. With these types of cars, hatchbacks have a legacy of being fun-to-drive Hot Hatches.

They also offer track performance packages, tuning up the whole drivetrain and making the cars even more impressive.

I’ve had the luxury of driving a kitted Focus ST, and I couldn’t stop laughing or smiling for the whole trip.

Ford Focus RS 2016 3rd Gen blue hatchback near a Louis Vuitton store in Berlin, Germany
2016 Ford Focus RS

Other cars have an optional hatchback that I personally like way more than the sedans. In this category, you’d have cars like any BMW series —which they call the Gran Turismo sub-model, the Kia Stinger (Kia owners, I told you I’d make it up to you), and even the Civic hatchback.

With the optional hatchback packages, you get all the upgrades of a hatchback on the same tried-and-true vehicle. If you love the Civic and also want to own a fun hatchback, you can.

I would happily pay extra money for any of these vehicles just because of how unique the driving experience is.

Great Visibility

Since the trunk is part of the cabin, a few blind spots are completely removed. The entire back wall becomes a massive window at a better height and with less curvature than in a sedan. However, there are exceptions like the Mazda 3 hatchback due to the sloping exterior design resulting in a smaller rear window.

VW Volkswagen Golf Mk8 GTI 2021 interior view with the steering wheel visible
2021 VW Golf GTI Mk8 – Interior

This extra visibility means a few things. For one, you can be a lot safer as you drive around since you can see more. Secondly, you can feel more comfortable while you’re driving. With all of the extra visibility around you, you can better predict what drivers around you are going to do and react accordingly.

Visibility is often one of the biggest considerations when it comes to buying a car. Since hatchbacks are considerably safer thanks to the added rear visibility, I’d argue that they’re worth spending more for.

Smaller Overall Profile

In certain cases, hatchbacks are smaller than sedans. It’s not always true for cars like Civics that offer a sedan or hatchback under the same family. However, cars that are only made as hatchbacks, like the VW Golf, are much smaller than sedans.

This refers to the overall height, length, and width of the vehicle. It also means a smaller wheelbase — a term that refers to how far the front wheels are from the rear wheels.

Volkswagen VW Golf GTI 2022 trunk boot cargo space
2022 VW Golf GTI – Trunk Cargo Space

If you combine these facts, you’re left with a vehicle that can maneuver a lot better and take up less space. Parking lots suddenly become less daunting, and parallel parking on the street is less embarrassing.

For rally racers, the smaller profile means that they can drive a lot faster around corners and speed up their lap times.

Since this has to do with better performance and maneuverability, it’s easy to justify spending on these perks.

Final Verdict: Are Hatchbacks Worth the Extra Money?

If you couldn’t guess by now, I’ll explicitly say that I think hatchbacks are worth the extra money. In the past 5 years, the market has seen a huge uptick in hatchback sales, so I don’t think I’m alone in this point of view.

Hatchbacks are unique, not that expensive, fun to drive, offer better visibility, and look great. All-in-all, I would be willing to pay more than just a few thousand dollars to own one — but luckily, I don’t have to.

Conclusion

As you just learned, hatchbacks are more expensive than sedans because they’re more uncommon and have a group of passionate buyers in their corner. I also outlined some of the reasons why I think they’re worth more money and I have no problem spending more for a hatch.

If you have more car questions, take a second to look through my blog. I’ve answered a lot of major car questions, so you might find the answers you’re looking for. Also, be sure to check out the car products that I highly recommend.

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Ernest Martynyuk

An automotive enthusiast who's been tinkering with vehicles since I was 15-years old. Repairing automotive electronics has been my main job for over a decade now and have a passion for everything technical regarding cars.

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