This hatch may seem to have it all, but is it worth $40k?

The Toyota Corolla needs little introduction: the world’s best-selling car (53.4 million to October 2023), and one of the longest-running new-car nameplates in Australia, arriving here in 1967 after its overseas launch a year earlier.

But the boom in SUV and electric-car sales means the Toyota Corolla is on the brink of losing its 10-year winning streak as Australia’s top-selling passenger car to the battery-powered Tesla Model 3.

And it appears on track to give up the same streak in the small-car category to its long-time rival, the Hyundai i30 – amid severe stock shortages for Toyota over the past two years.

The current-generation Corolla hatch arrived in Australia in 2018, and in that time has seen the arrival of a new Mazda 3, Volkswagen Golf, Kia Cerato, Subaru Impreza and Honda Civic, all of which have climbed in price. Yet Toyota has one ace up its sleeve that all but Honda have failed to match: hybrid power.

The introduction of a midlife styling and technology update in 2022 suggests the current Corolla may be with us for at least a year or two more before a new model arrives. Is it still worth considering in 2024?

There are 12 variants in the Toyota Corolla range, across hatchback and sedan body styles, petrol-only or petrol-electric hybrid power, and three equipment levels: Ascent Sport, SX and ZR.

The car on test is the top of the hatchback range, the ZR Hybrid, which is priced at $39,100 plus on-road costs.

The price has gone up $1480 since late 2023 with no changes in equipment, and is a fair way north of the 2018 launch price of $31,870, although today’s model is better equipped.

This test vehicle is finished in Silver Pearl paint with a black roof – a $1350 option – and a no-cost red and black interior, bringing its price to $40,450 plus on-road costs, or about $44,500 drive-away in New South Wales, according to Toyota Australia’s online price estimator.

Rivals include the Volkswagen Golf 110TSI Life ($39,190), Hyundai i30 N Line Premium auto ($37,300), Mazda 3 G25 GT ($38,420), Subaru Impreza 2.0S ($37,990), Kia Cerato GT ($36,390) and Skoda Scala Signature ($42,490 drive-away). All prices above exclude on-road costs unless stated otherwise.

Standard features exclusive to the ZR include 18-inch alloy wheels, upgraded bi-LED headlights, a 12.3-inch digital instrument cluster, head-up display, synthetic leather-look and suede upholstery, heated front sports seats, an eight-way power-adjustable driver’s seat, eight-speaker JBL stereo, and ambient cabin lighting.

Features carried up from cheaper models include an 8.0-inch touchscreen with wireless/wired Apple CarPlay and Android Auto, satellite navigation, wireless phone charging, keyless entry and start, dual-zone climate control, front and rear parking sensors, a rear-view camera, and a full suite of advanced safety technology.

The Corolla ZR Hybrid hatch is the only model in the regular line-up with a tyre repair kit in place of a full-size or space-saver spare wheel.

The Corolla does not have the flashiest or most high-tech interior in the small-car class, but with buttons and dials for key audio and air-conditioning functions – and a clean layout – it is simple and easy to get along with.

Drivers looking for a sporty feel can sit low in the car, with eight-way power adjustment in the driver’s seat, and tilt and reach adjustment in the faux leather-trimmed steering wheel making it easy to find a comfortable position.

The sports seats in this ZR grade are a highlight, offering good comfort and excellent support for a humble hybrid hatchback – not a high-performance car – mixing synthetic leather-look trim with suede inserts that add to the sporty feel. They offer heating and lumbar support.

If it were our money, we’d tick the box for the no-cost red accents; a more restrained all-black option is also available.

All key interior surfaces touched by the occupants – the armrests, door tops, dashboard, and areas of the centre console where your knees rest – are wrapped in a synthetic leather-look material, though some padding in the armrests could be softer.

Amenities up front include dual-zone climate control, a wireless smartphone charging pad, keyless entry and start, electric parking brake, illuminated vanity mirrors, two USB-C ports, and a 12-volt socket.

While the glovebox is generously sized, storage elsewhere is limited, with a tiny compartment in the centre console that can’t fit much more than a wallet and a pair of sunglasses. The door bins are not as large as some rivals, and front occupants will find themselves squishing phones, glasses, wallets and keys in the cupholders or on the wireless phone charging pad.

Space in the rear seats has been a weak point for this generation of Corolla hatch since it arrived in 2018. At 6ft (183cm) tall, I can fit behind my driving position, with adequate head room and toe room – but my knees are touching the seat in front, and it would be an even tighter squeeze for taller adults.

Carrying three passengers across the rear in a pinch is possible, but it’s better suited to two people.

Ease of entry and exit is hampered by the sloping roof line and a small door opening, and the black roof lining exacerbates the cramped feeling in the rear.

Rear-seat passengers are treated to rear air vents, cupholders in the doors, fold-down centre armrest, two map pockets, three child-seat top-tether points, and two ISOFIX anchors. However, there are no USB ports nor any pockets in the doors for storing wallets, devices or other items, and the door tops are made from hard, scratchy plastic.

At 333 litres, the ZR Hybrid has the largest boot in the Corolla hatch range because it swaps the spare wheel – either a full-size or a space saver – for a tyre inflator kit to repair minor punctures on the roadside.

It means the boot goes from one of the tiniest in the small-car class to a roomy space that defies its capacity, with enough room for a full-sized suitcase, a carry-on suitcase, and a few soft bags.

However, there are no amenities in the cargo hold beyond a shopping bag hook. As the boot is deep with the deletion of the spare wheel, the load lip is also quite high, and the rear seats don’t fold flat at the same level as the boot floor.

Standard in all Toyota Corolla hatchbacks and sedans in Australia is an 8.0-inch infotainment touchscreen with wireless and wired Apple CarPlay, wired Android Auto, Bluetooth, voice control, and AM, FM and DAB digital radio.

All variants except the Ascent Sport petrol and hybrid hatch, and Ascent Sport petrol sedan are fitted with embedded satellite navigation.

At eight inches, the screen is small – compared to the 10 or 12-inch screens in similarly priced rivals – and the thick black bezel around the display cheapens the look. Toyota offers a 10.5-inch touchscreen in other markets, but not Australia.

The infotainment software is not the fastest, sharpest or most attractive in the class, but it’s relatively easy to use and responds quickly enough. Wireless Apple CarPlay worked well in our testing, although we found that if we wanted to charge the phone via the USB port – but still use wireless CarPlay – we had to let CarPlay connect before plugging the phone in, as doing the opposite wouldn’t engage CarPlay.

It is worth noting there is a wireless smartphone charging pad ahead of the gear shifter, which is powerful enough to add charge to the phone while running navigation and music streaming.

The 12.3-inch digital instrument cluster is clear and bright, but it doesn’t offer much customisation in terms of layout – though it can display a widescreen navigation map, which many other cars with digital instrument screens aren’t able to do.

A rarity in this class is the fitment of a head-up display, which shows the vehicle’s speed, the current speed limit, and other key information. It’s a handy feature that means you’ll rarely need to look down at the instrument cluster.

The eight-speaker JBL sound system is adequate, but doesn’t deliver the punch or sound quality we would expect of a ‘premium’ branded sound system.

The quality of the rear-view camera is below average – and grainy at night – with simple guidelines that don’t move when you turn the steering wheel.

The Toyota Corolla 2.0-litre petrol and 1.8-litre hybrid hatch were awarded five stars by the Australasian New Car Assessment Program (ANCAP) in 2018 based on crash testing conducted in Australia.

The score will expire after 31 December 2024 – unless Toyota submits the Corolla for retesting under the current crash-test criteria, which are far more stringent than those in 2018 when the vehicle was initially rated.

Standard safety technology includes autonomous emergency braking (AEB) with pedestrian/cyclist/motorcycle detection and intersection assist, adaptive cruise control, lane-keep assist, lane-following assist, blind-spot monitoring, rear cross-traffic alert, speed sign recognition, door exit warning, and front and rear parking sensors.

There are also seven airbags, including one for the driver’s knees.

Some of the advanced safety systems are overzealous and have been tuned to react at the slightest chance of a collision – rather than risk intervening too late.

There was one false activation of the AEB system – during a quick lane change approaching a set of traffic lights, when the car thought we were going to crash into the line of cars waiting to turn – and on multiple occasions the blind-spot monitoring system slammed the brakes if a car drove past while parallel parking, even if the car was in reverse gear and pulling into the spot, rather than towards the line of traffic.

The lane-keep assist system is well calibrated, however, and isn’t too intrusive in the city. The lane-centring assist tech – marketed as Lane Trace Assist – is natural in its operation, though as with many systems of its type, it struggles on tight highway bends.

When stopped at the front of the queue at the traffic lights, pedestrians walking ahead of the car trip the front parking sensors. At other times, we found the sensors – and distance display on the infotainment screen – slow to react to the closing distance to the car in front or behind when trying to park in a tight space.

The Toyota Corolla is covered by a five-year/unlimited-kilometre vehicle warranty for private buyers (excludes commercial use), including the hybrid battery.

If buyers follow the service schedule as per the logbook, Toyota will extend the warranty on the petrol engine, hybrid components and driveline to seven years/unlimited kilometres, and “up to” 10 years/unlimited kilometres for the hybrid battery pack if it is inspected annually by a Toyota dealer.

Servicing costs are among the cheapest in the car industry, at $245 for each of the first five visits, separated by 12-month/15,000km intervals – amounting to $1225 over five years/75,000km.

Among petrol-powered cars, only the Honda Civic – available in petrol and hybrid – is cheaper, at $199 for each of the first five services at shorter 12-month/10,000km intervals.

Five years/75,000km of servicing is quoted as $1739 for a 2.0-litre auto Hyundai i30 hatch, $2031 for a 2.0-litre auto Kia Cerato, $2168 for a Mazda 3 G25, and $3356 for a VW Golf Life (or $2650 on a prepaid service plan). Meanwhile – due to shorter distance intervals – five years or 50,000km of servicing for a 1.6-litre turbo Hyundai i30 hatch and Kia Cerato costs $1625 and $1922 respectively.

After the first five services, the Toyota becomes more expensive to maintain. The next five services at a Toyota dealer (until 10 years/150,000km) are said to cost between $380.80 and $700.50, for an annual average of $501.20.

The Dunlop SP Sport Maxx 050 (225/40R18) on the Corolla ZR Hybrid are priced from $262 (from Bob Jane T-Marts), at the time of writing in December 2023.

A year of comprehensive insurance coverage from a leading provider costs $1604, based on a comparative quote for a 35-year-old male driver living in Chatswood, NSW. Insurance estimates may vary based on your location, driving history, and personal circumstances.

For context, the same insurance quote calculator lists $1243 for a Hyundai i30 N Line Premium hatch, $1184 for a VW Golf Life, $1198 for a Mazda 3 G25 Astina – or, for some left-of-field electric alternatives, $2997 for a BYD Dolphin Premium, $2004 for an MG 4 Excite 64, $2079 for an MG 4 Essence 64, or $1986 for a GWM Ora Extended Range.

Toyota claims the Corolla ZR Hybrid will use just 4.0 litres per 100 kilometres of 91-octane regular unleaded petrol in mixed driving – or 3.8L/100km in urban motoring and 4.3L/100km on the highway or country, where hybrids are less efficient as they have less opportunity to use the electric motor.

Over a week and 700km of testing across city, highway and country-road driving, we observed 5.7L/100km at the fuel bowser, which – while still very frugal for the class – is still 40 per cent higher than the claim.

However, it is worth noting that, prior to some spirited country-road driving – where we were working the engine hard – the trip computer showed 5.0L/100km, or about 5.3L/100km at the pump. This is derived from city commuting and about 400km of highway driving.

On a 195km test loop on the Hume Highway south of Sydney – which has a 110km/h speed limit – we observed fuel consumption of 4.9L/100km on the trip computer, equating to 5.2L/100km at the fuel bowser.

In city driving – when the hybrid system can capture energy under braking and use the electric motor to move the car at low speeds – we regularly saw fuel consumption in the 4.0 to 4.5L/100km range, occasionally dipping into the high 3L/100km bracket, which is half of what a petrol-only hatchback would use in similar conditions.

We found the trip computer to read fuel consumption about five per cent better than in reality.

The Toyota Corolla ZR Hybrid combines a 1.8-litre four-cylinder petrol engine with an electric motor and a small lithium-ion battery for a combined power output of 103kW.

Around town, the hybrid system does its best work, accelerating from rest – the most energy-intensive part of day-to-day driving – to between 25 and 35km/h on electric power, depending on how gentle you are with the accelerator pedal, before the petrol engine fires up to assist.

It feels zippy at low speeds, but above 60km/h or 70km/h it starts to run out of punch – even by small hatchback standards, not those of a sports car.

Overtaking on a country road may require some planning, and doing so generates a lot of noise from the petrol engine, as the continuously variable transmission holds it at the optimal RPM for maximum power.

Aside from this, the transition between petrol and electric power is close to seamless.

The battery pack is small – and is not meant for travelling meaningful distances on electric power – but it can store enough energy to let the car creep through a traffic jam without firing the petrol engine too often. It’s charged by the petrol engine, or energy captured under braking, so it doesn’t need to be plugged in externally.

The 18-inch wheels and low-profile sports tyres on the ZR mean it’s not quite as comfortable over bumps as other models in the Corolla range – you can feel sharp edges and imperfections in the road – but it is by no means too stiff or harsh to live with.

The steering is light yet direct and accurate – though the 11.4-metre turning circle is big for a car of this size – and the brake pedal is easy to modulate, with a smooth transition from the electric motor’s regenerative braking to the regular ‘friction’ disc brakes.

The sportier suspension set-up around town makes for a more tied-down feel on an undulating country road, and it makes for a surprisingly fun car to drive.

It feels nimble and keen to turn into corners, it’s not disturbed by mid-corner bumps, there’s not much body roll, and the Dunlop SP Sport Maxx tyres hold on well in fast corners.

The only shortcoming here is the lack of power at speed, which is noticeable when you’re met with a winding country road and want to have some fun behind the wheel. But there is a Corolla for enthusiast buyers, the 220kW GR hot hatch – built on the same excellent bones as this ZR.

The trade-off of the sporty Dunlop rubber is an incredible amount of tyre roar at highway speeds – particularly on coarse-chip surfaces – which can’t be completely drowned out by the sound system. There’s also some wind whistle at high speeds.

The bi-LED headlights offer good illumination under low and high beams, though they’re not the best we’ve seen in a small car or SUV.

If you’re shopping for a small, stylish, fuel-efficient city car – and don’t plan to carry rear passengers or venture on country road trips often – the Toyota Corolla Hybrid should be near the top of your shopping list.

The ZR Hybrid trim is well equipped, safe, attractive inside and out, easy to drive around town, fun to drive on a winding road, and above all affordable to run thanks to frugal fuel use and low servicing costs.

However – as alluded to above – there are some shortcomings to consider, namely compromised interior and boot space compared to key rivals, lots of wind noise and a lack of power at highway speeds, and infotainment technology that still trails the best small cars on sale.

The lack of a spare wheel in the ZR Hybrid is a consideration for country buyers, who a different model grade may better serve, but which has an even smaller boot.

If these weaknesses are not priorities for you, the Toyota Corolla hybrid is a great choice.

If the price is fair to you, and you are happy with the compromise of no spare tyre, the ZR Hybrid hatch is the most stylish and best-equipped model in the range.

However, if you are willing to compromise on some of the luxury features, the entry-level Ascent Sport Hybrid – with the $1000 Convenience Pack, which adds parking sensors and rear cross-traffic alert technology – is better value for money, as is the middle-of-the-range SX Hybrid, which ditches the base model’s plastic steering wheel for a leather-look item, among other extras.

The hybrid is worth its circa-$3000 price premium over the regular petrol model, as the fuel savings are significant enough to pay back the higher purchase price within a few years of ownership.

As with many Toyota hybrid models in Australia, you may need to wait longer to take delivery of a Corolla hybrid than small-car rivals from Mazda, Subaru, Hyundai or Volkswagen.

Wait times range from three to 12 months, according to buyers who recently purchased Corolla hybrids in Australia. The exact wait will depend on the dealer you’re purchasing from, where you are in the order queue at the dealer, and your preferred model grade, body style and colour.

To contact a Toyota dealer for the most accurate estimates on delivery times, click here to find your nearest showroom. You can also find Toyota vehicles for sale at Drive.com.au/cars-for-sale.

We would also recommend test-driving a Volkswagen Golf Life, which is the Drive Car of the Year Best Small Car for two years in a row, after beating a Toyota Corolla hybrid – as well as a Hyundai i30 hatch – in the 2022 awards.