Iron on reaction with HCl forms …

Fe (II) or Ferrous compounds are readily formed as the 2nd ionization energy is considerably less as compared to the third ionization energy.  The amount of energy required to remove the third electron from Iron is as much as the energy to make it Fe²⁺.

Also Fe²⁺ forms fairly stable compounds.Fe (III) is more stable than Fe (II) , but additional energy is needed to take that extra electron out.

Fe has electronic configuration as:[ Argon ] 3d⁶ 4s².

The outermost electrons in 4s2 are readily given out to Chlorine. But it requires a further catalyst or oxidant like Oxygen or H2O2 etc, to give out an unpaired 3d^6 electron from d orbitals.

In general , Ferric [ Fe (III) ] compounds are more stable as compared to Ferrous ( Fe (II) ) compounds. Rust that forms slowly over a long period, is Ferric Oxide Fe₂ O₃.  So Iron has an oxidation state of 3 here.

Only very small amount of Fe Cl₃ is formed when Iron reacts with H Cl acid. A lot of Fe Cl₂ is formed.  Additional conditions like pressure, catalyst are needed to increase the proportion of Ferric chloride.