I am no expert, but have owned a 2005 XR since 3/18/05 - my first new car:
I was primarily looking for something with a good amount of cargo room which could be converted to passenger space if the need would arise. I was also looking for good gas mileage. I looked at some pickups, but even the cheapest small pickup would be over $20K, + the cost of a topper, and it would get perhaps 15 miles to the gallon with an automatic. I looked at some SUVs, including a test drive of the Toyota RAV4, which gets better gas mileage than a pickup, but the cheapest price would be around $24,000, which was more than I was willing to spend, although I loved the quality of its construction (its factory undercoated - not a spot of rust underneath).
So I decided for a small wagon type auto. I test drove the similarily sized and priced Ford Focus Wagon, which is a few inches longer. One thing I did not like about the Focus was that the back seats could not be completely folded flat - they sit behind the front seats in the rear seat foot rest area and cut down on cargo area space. The focus does have a slightly bigger engine if I recall (2.0L), but both had similar acceleration and engine noise.
I intially didn't look at the Matrix because it looked too small, but once you fold down those two back seats and remove the head rests - you have a lot of cargo room - can haul a large screen tv box with no problem. Another factor in buying the Matrix was that Toyota was at the time offering a $1000 rebate. The main reson I ended up buying a XR as opposed to just the standard Matrix is that many dealers don't even carry the standard model - they want to push at at least the XR it seems.
The XR I purchased came with:
50 State Emissions FE
All Weather Guard Package with Rear Wiper CK
Anti-Lock Brakes AB
Extra Value Package #1 (Cruise, Front Fog & Driving Lamps, Front and Rear Spoiler) SP
17" Aluminum Wheels AA
To this I added undercoating, one set of lug locks, and the back bumper rubber guard strip. The dealer didn't charge any labor for installing the bumper guard. The total MSRP window sticker was $19,150.00, with a Extra Value Package MSRP Discount of $250.00 = $18,900.00. From this there was a $1,000 Toyota rebate of $1,000 bringing the total to $17,900.00 Fromt this price the dealer made an offer to cut the price by $1,115 to $16,785.00. This was their offer with no trade in. This was also the price from a large dealer located 70 miles away which operates 4 dealerships and maintains at least 1000 cars on hand. My local, much smaller, Toyota dealer wants you to pay full MSRP. I have service performed at my local dealership due to the time required to travel to the dealer where I purchased the auto and because their prices are in line, and often cheaper, than the larger dealer. I live in Iowa.
I have obtained gas mileage of 28-32 so far. The only mechanical problem was a freak failure of the charcoal canister, which was replaced under warranty within 2 weeks after taking the car in for a check engine light.
Things I would change:
Although the car comes with 17" rims it comes with a 16" spare - lol - and I don't think there is room in the spare tire compartment for a 17" stock rim.
I was little pissed for the dealer spraying undercoating on the inside of the aluminum rims. Be sure to check this before you leave - don't let the shiny newly washed car look fool you. The spots will come off with Goo Gone, but its just the idea of me having to waste my time.
The back cargo cover sucks. This is not really a bag thing for me since I have the back seats folded down 99.9% of time, but I'd have the dealer show you it if this is something of concern.
If you are really on a small budget might I suggest the Scion line from Toyota - these are aimed entry level young drivers. I looked at the Scion Xa and Xb which come with smaller engines (1.4 if I recall) and are priced several $K lower than the Matrix. I opted for the Matrix as I live in Iowa and wanted something that would set up a little higher in the snow, but the Xb and Xa shouldn't be problem for you as "It Never Rains in Southern California". :0)
I'd wish they change the panic button on the back of the key holder - little easy to set off by accident.
Alright! I finally made it into the Lamborghini Countach Club - finally got to see one in person as it pulled up in a nearby lane at a stop light, which is a quite rare site here in small town Iowa. My mouth is still watering from the sound of that engine.