Toyotas are great cars; I've owned 4. Well, I didn't own them; I was leasing them. I didn't have any problems with any of them. The Matrix makes number 4.
First, I want to respond to a number of things I read about the Toyota Matrix that almost caused me to not consider it, inluding noisy, clunky, uncomfortable. I have the XRS model, which includes the larger engine, wider tires and a number of other nice features. As small cars go it is quiet. The seating is NOT uncomfortable, and this is from a guy with significant back problems. Considering the small wheelbase the ride is very good. The designers of the Matrix made the inside quite roomy, easily seating 4 - haven't tried 5. Seats are comfortable, although I would like more lumbar support for long trips. Passenger storage is good, but not great, although my opinion improved a lot after my wife discovered the SECOND, LARGE console storage compartment below the first little one. There are two cup holders in front and two in back that are reachable from the front, if necessary. There are also two "water bottle" sized holders in the map pockets that are usable as long as you don't need maps. I didn't like the outside appearance at first, but it's grown on me. It's a very sporty, but heavy look in my opinion. The rear and side view mirrors are plenty large, but there are blind spots I just couldn't eliminate by making adjustments. I purchased an inexpensive stick-on convex mirror for the driver's side mirror which solved my problems. There's plenty of horsepower to easily merge into traffic or accelerate out of a difficult traffic situation. I've been getting 26mpg on the highway(I do confess to a lead foot) which I found disappointing because my '99 Sienna minivan with 34 more horses only gets 2mpg less(same lead foot). The 5-speed automatic transmission works smoothly, but if you are in city traffic it wants to shift up and down way too much. If I switch the shift mode to "S" I can set an upper limit on what gear I'm in which is helpful. Cruise control works very nicely. Handling is very good. It would be great if the steering was a bit quicker and the suspension was a little stiffer. The only other complaint I have is that if I want to get a duplicate key(includes remote locking, unlocking) it would cost me over $300!!. I was able to get a duplicate (no remote capabilities) for $75 from an independent locksmith, but that's still an awful lot of money. Overall, this is an excellent car, and my wife and I are quite happy with it. I can't afford my "ideal" car, but this one comes close at a very reasonable price (not counting the duplicate key!).
I have owned my matrix for about 5 years now. I bought it brand new. It gets about 32-35 MPG. I have the 5-speed manual transmission and it's fun to drive. For hauling stuff it's great because I've put 25 bags of 2 cubic foot bags of mulch in the back without problems. Once you fold down the back seats the car is like driving a small truck. It can take all the beatings and weight and keeps running. Great size for small families. I am also 5'10" and it has a lot of room for the driver and passengers. It does have more leg room than a Tahoe