Pros: Good fuel economy with manual transmission; standard USB/iPod connectivity; accommodating back seat; stylish interior

Cons: Four-speed automatic hurts efficiency; steering wheel doesn't telescope

The now hatchback-only 2012 Toyota Yaris has been fully redesigned-and not a moment too soon, because the subcompact class has never been more competitive. Thanks to the twin pressures of rising gas prices and economic uncertainty, subcompacts have become more popular over the past few years, and automakers are scrambling to convince consumers that their offerings aren't just cheap but are gratifying to own and drive, too.

Toyota had a tough job in this regard with the previous Yaris, but the new 2012 Yaris looks like it will be a considerably easier sell. It's thriftier, better to drive and nicer on the inside.

Granted, a couple of rudimentary pieces from the old Yaris remain. First and foremost is the four-speed automatic, an outdated piece that holds back the 2012 Yaris's fuel economy. Then there's the steering wheel, which for some reason still doesn't telescope-a pain for long-legged drivers.

But in general, the new Yaris is a definite improvement over the car it replaces. What remains to be seen is whether it has been improved enough to make a name for itself in this increasingly crowded class.

Comfort & Utility

The 2012 Toyota Yaris is offered in L, LE and SE trim levels. The base L model includes 15-inch steel wheels, air conditioning, a four-speaker stereo with iPod/USB connectivity, a tilt-only steering wheel (a telescopic function is unavailable) and a fold-down back seat. The LE adds a height-adjustable driver's seat, a six-speaker sound system, Bluetooth connectivity, a 60/40 split folding back seat and steering-wheel-mounted audio controls. The sport-themed SE tacks on 16-inch alloy wheels, unique exterior styling cues, "sport fabric" upholstery, a leather-wrapped sport steering wheel, special instrumentation and cruise control (optional on the LE).

The Yaris's front seats are nothing to write home about, although the SE's sport-fabric upholstery does add a bit of grip. A potential deal breaker for taller drivers is the tilt-only steering column, which requires a serious reach forward if the seat is slid all the way back. We love the Yaris's new dashboard, though, as it's got far more style than ever before, vaulting the Yaris to the head of the class in this respect. The materials aren't bad, either. No, the plastics aren't luxurious, but at least they have a distinctive grain, and everything seems to be bolted together well.

The Yaris's legitimately accommodating back seat is proof that subcompacts don't have to punish rear passengers. Even full-size adults can ride back there for a while without complaint. Kudos to Toyota's engineers for figuring out how to make this happen in such a tiny car. Speaking of tiny things, the Yaris's hatchback trunk measures a bit more than 15 cubic feet, which is about the size of a mid-size sedan's trunk-and that measurement goes all the way up to the roof, so the portion behind the back seat might closer to 10 cubic feet.

Still, fold the Yaris's rear seatback down, and you'll have a very handy box-shaped cargo bay. Toyota doesn't estimate the maximum cargo capacity, but it's a useful amount. That's a hatchback for you.

Technology

By class standards, the Yaris brings a fair amount of technology to the table. We like that even the most basic Yaris comes standard with iPod/USB connectivity, for example, and the available upgraded stereo brings Bluetooth connectivity as well. There's not much else going on in this department-no navigation system, no Entune mobile app interface-but the Yaris easily gets a passing grade.

Performance & Fuel Economy

The Yaris is powered by a 1.5-liter inline-4 rated at 106 horsepower and 103 lb-ft of torque. It's not our favorite engine in the segment. Noise is pronounced during acceleration, and there's not much get up and go, either. A five-speed manual is standard, and it's actually quite pleasant to operate; we highly recommend it over the optional four-speed automatic, which feels a little uncouth compared with the newer five- and six-speed units available elsewhere. The automatic's negative effect on fuel economy is clear when you look at the automatic and the manual side by side: the former gets 30 mpg city/35 mpg highway, according to the EPA, while the latter gets 30/38 mpg.

Safety

The 2012 Yaris comes with standard stability control, nine airbags and whiplash-reducing front seats.

In government crash testing, the Yaris got an overall rating of four stars out of five, including four stars for frontal impacts and five stars for side impacts, and four stars for rollover safety. The independent Insurance Institute for Highway Safety awarded the Yaris its top rating of Good in every category and named the car a Top Safety Pick.

Driving Impressions

There's no doubt that Toyota has upped the fun factor with the new 2012 Yaris. The steering is noticeably tighter and more responsive than before, and the car has an eagerness in the way it zips around that we don't remember from the previous model. The engine is noisy, though, and road noise is something of an issue, too. Keep an eye (and ear) on those negatives as well as the positives when you're test-driving this Toyota.

Other Cars to Consider

Chevrolet Sonic - All new for 2012, the Sonic excels at cruising on the highway, and it's got some neat interior touches. A tough competitor for the Yaris.

Kia Rio - Blessed with possibly the best-looking exterior and interior of any subcompact, the Rio is the runway model of this group, and it's a pleasant drive, too.

Toyota Prius c - If you have up to $20,000 to spend and want to use less gasoline, check out the new Prius c, which is based on the Yaris-except it gets 50 mpg.

AutoTrader Recommends

We'd take the manual-transmission Yaris SE, with its sport-themed packaging and full roster of standard features. It's not quite a bargain, though, so make sure you take the time to see what else is out there.

author photo

Josh Sadlier is an automotive journalist based in Los Angeles and has contributed to such publications as Edmunds.com and DriverSide.com. He holds arguably the most unexpected degree in his profession: a master's in Theological Studies.

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