The current economic situation and high fuel prices make a compelling argument for the Corolla Hybrid.

Toyota has updated the hybrid version of its best-selling small car, giving the new model electric all-wheel drive, a more powerful hybrid system, and new safety features. Best of all, the starting price is actually dropping by $1,250. Take that, inflation!

The Toyota Corolla has been around since 1966, and has been the best-selling car worldwide since 1974. More than 50 million Corollas have been sold in its 56-year history.

Now for the 2023 model year, the Corolla Hybrid is gaining optional electric all-wheel drive, similar to the system employed by many other Toyota and Lexus hybrids. The front wheels are driven by a combination of a 1.8-liter gasoline engine paired with an electric motor, and a second electric motor will power the rear wheels. The system yields 13 more horsepower and 10 more pound-feet of torque than the previous hybrid, for a total of 134 horsepower and 156 pound-feet. The new system also returns 47 MPG for front-wheel drive models, and 44 MPG with all-wheel drive.

Another big feature for the 2023 model is Toyota Safety Sense 3.0. This update to Toyota's comprehensive safety suite adds Proactive Driving Assist with Obstacle Anticipation Assist and Deceleration Assist. This is on top of the already impressive feature list that includes adaptive cruise control, a pre-collision system with pedestrian detection, lane departure and lane tracing assist, automatic high beams, and road sign assistance. Although it's not technically part of TSS, all Corolla Hybrid trims will also include blind spot monitoring and rear cross traffic alerts.

Inside, the Corolla Hybrid is still an economy car, but that doesn't mean it's cramped or uncomfortable. This is a fine choice for a drive-to-work car or any everyday driver. On the dashboard, you'll find an 8-inch high-resolution touchscreen. The infotainment system includes support for wireless Android Auto and Apple CarPlay. All models add two rear-seat USB-C ports for a total of four USB-C ports in the car.

The 2023 Corolla Hybrid will be available in five trim levels, ranging from the affordable LE, which gets that $1,250 price reduction up to the special Infrared Edition. The Hybrid LE is also available with AWD. Then there are the sportier SE and SE AWD grades, which inherit the standard Corolla SE's sport suspension and the firmer-feel electronic power steering. Finally, there's the more upscale XLE trim, which is only available as a hybrid.

Every new model needs a special edition, and for 2023 Toyota is offering the SE Infrared Edition in both FWD and AWD versions. The Infrared Edition derives its name from the unique red trim accenting the exterior and interior, standing out against Ice Cap, Midnight Black Metallic or the all-new Underground exterior colors.

On the road, the new Corolla Hybrid is still the same Corolla that has pleased 50 million buyers. It's functional, easy to drive and park, and offers good performance. In the current economic situation, the high fuel economy and lower purchase price make a compelling argument for this model, so smart buyers will get to their Toyota dealers soon to get on the list for what is certainly the best Corolla ever made.

2023 Toyota Corolla Hybrid

Base price: $22,800

Price as tested: $24,200

Type: Compact sedan

Engine: 1.8-liter hybrid (134 hp, 156 lbs-ft)

Transmission: Continuously Variable Transmission

EPA estimated mileage: 47/41/44

Overall length: 182.3 inches

Curb weight: 2,850 pounds

Final assembly: Takaoka, Japan