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17" was the optional wheel size for the Matrix XRS. Sticking with 16" or going with 17" wheels is up to you - depends on what you are after: lighter weight, better looks, etc. You will get a lower profile tire with the 17" due to the larger wheel diameter. That will ride a little harsher than the 16" setup, but some prefer the sharper steering and handling of a shorter sidewall. If the roads around you are pretty beat up - might be wiser to stay with a 16" wheel and tire package. If the roads are in good shape and you don't see too many road hazards, running 17" will be fine.
Also keep in mind the stance of the car - if you are still running the OEM struts and springs, going with a lower profile tire will make it "appear" the wheels are smaller even though they are larger wheels, just a illusion though. Try the online wheel photochopping tools - like the one on Tirerack.com to get an idea of what they will look like.
The critical bits are the wheel offset, bolt pattern, wheel width, center (hub) bore, and tire diameter.
OEM 16" steel wheels are 16"x6.5", 39mm offset, 5x100 bolt pattern, 54.1mm hub bore, with a 205/55-16 tire.
If you went with another 16" or a 17" wheel, you'll need to make sure the offset is within 35mm-45mm, uses a 5x100 bolt pattern, fits a 54.1mm hub bore (bigger is OK, just need to use hubcentric adapter rings, usually comes with the new wheel) and no wider than 7" to ensure proper clearance.
Tire size for a 16" wheel - 205/55-16
Tire size for a 17" wheel - 215/45-17
How big can you go - there are a few Matrix out there running 20" wheels. You could run smaller wheels, I believe the 15" wheels from the 9th gen Corolla would be the smallest you'd want to run.
That said, if you are looking to pickup OEM wheels from Toyota vehicles - the wheels from the 2003-2008 Corolla will fit the Matrix. Wheels from the 2nd gen Matrix with the 1.8L engine will also fit. Wheels from the Scion tC (OEM 17") will also fit.
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2002 Corolla S, 1.8L 1ZZ-FE VVT-i
2003 Matrix XRS, 1.8L 2ZZ-GE, VVTL-i (RIP)
2009 Matrix XRS, 2.4L 2AZ-FE VVT-i
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