The essential difference between handmade and machine-made cigars lies in the fact that, on the whole, most machine-made cigars aren't made with long fillers. Fillers, that is, which run the whole length of the cigar, thus making the drawing and burning qualities (they burn faster and become hotter) of the machine-mades significantly inferior. Some machine-made brands, Bering for instance, use long fillers, making them better but still inferior to handmade cigars. The quality of wrappers on machine-made cigars is also usually inferior to those used on the best handmades.
For cheap, mass market, machine-made brands, blended filler is fed into rod-making machines (a process similar to cigarette making) and covered by a continuous sheet of binder. This creates a tube which is sealed at each end to the appropriate length. The wrapper is then added and the cigars trimmed.
In the case of more expensive machine-made, an operator sitting in front of a cigar-making machine feeds a mixture of filler tobacco (usually shredded leaves or scraps) into a hopper, and places two binder leaves on a plate where they are cut. The two leaves are then positioned, overlapping, on a moving belt which feeds them into the rolling machine. This wraps the measured amount of filler and feeds out the cigar, which is then trimmed.
It is reasonably easy to tell the difference between handmade cigars and all but the best machine-mades: the caps on machine-mades are often very much more pointed; the cigars tend to be much less smooth to the touch; and the wrapper is likely to be much coarser, quite often with protruding veins.
If a cigar doesn't have a cap, you can be certain that it is one of the cheaper machine-mades. Cellophane wrapping can also be a giveaway, particularly with Cuban cigars, but many very good non-Cuban handmade brands come wrapped in cellophane, so this is by no means an infallible way of telling whether the cigars are machine-made or not.
The Cubans recently introduced the concept of "hand-finished" machine-bunched cigars, with the Quintero brand for instance. These cigars have caps similar to handmades, long filler, and decent-quality wrappers. They can approach the experience of smoking a handmade cigar in flavor, though they wouldn't fool an experienced smoker.
Handmade cigars are so much more expensive than machine-mades quite simply because they take much longer to make, are labor-intensive, and use much more expensively produced and matured leaves. The handmaking process also leads to wastage.
