For 2008, the Highlander is bigger, heavier, more powerful and dramatically restyled inside and out. It comes with more safety features than before -- including a knee air bag to help keep the driver properly positioned behind the steering wheel during a frontal crash.
The new Highlander also rides on a new platform based on the Camry and Avalon sedans, has a quieter interior -- and is more expensive.
Starting manufacturer's suggested retail price, including destination charge, for a 2008 Highlander is $27,930 for a base model with two-wheel-drive, 270-horsepower V-6, five-speed automatic transmission and two rows of seats for a total of five people.
Third-row seating adds $740 and boosts seating capacity to seven.
This compares with the starting retail price of $25,565 for a base, five-passenger, 2007 Highlander with 155-horsepower, four-cylinder engine and four-speed automatic.
Toyota dropped the four cylinder for 2008, upgraded the transmission and now installs more standard equipment on the Highlander.
And while the price increase seems steep, the Highlander's starting price is about on par with the 2008 Saturn Outlook SUV with 270-horsepower V-6, which starts at $28,340 with standard three rows of seats, and the 2008 Honda Pilot, with 244-horsepower V-6 and three standard rows of seats, which starts at $28,230.
I liked the old Highlander's plain looks, and I wonder how long the new Highlander's clean, metal sides will stay that way. Doors from adjacent cars in parking lots could easily make some scratches and dents.
I also couldn't shake the feeling that the new Highlander styling is something that Mitsubishi might put on an SUV.
But no matter the styling, the roomier seats and cargo room are appealing.
Virtually every dimension of the Highlander has been expanded for 2008, notably the vehicle's length, width and height. This means more headroom in all three rows of seats, especially some 4 more inches for passengers at the back of the vehicle. Legroom grew, too, to a noteworthy 43-plus inches in the front seats, and 2 inches were added in the middle row.
Third-row legroom shrunk a fraction of an inch, but Toyota makes up for this with second-row seats that can slide forward and back to help distribute legroom.
Certainly, the new Highlander has a more upscale feel. Immediately after getting inside, I noticed the large, well-arranged buttons and knobs on the dashboard that were reminiscent of those in a luxury Lexus.
The ride was quieter than expected, with little wind noise.
The increase in power comes on quickly and smoothly with just a touch of the accelerator pedal, thanks to the 3.5-liter V-6.
In fact, I had to monitor the speedometer carefully, because it was so easy to get up over the speed limit. Driver and passengers just don't notice that they're going that fast in this new Highlander.
The new engine develops 248 foot-pounds of torque at 4,700 rpm, so there's not a shocking "oomph" at low speeds. Rather, the Highlander moves briskly up to speed without fuss.
In comparison, the Outlook's 3.6-liter V-6 develops 248 foot-pounds at a lower rpm -- 3,200.
Even with the power boost and bigger engine, however, the gasoline-powered-only model of the Highlander does a bit better in fuel mileage than some competitors.
The best federal government fuel economy rating is for a two-wheel-drive Highlander: 18 miles per gallon in city driving and 24 mpg on the highway.
For a two-wheel-drive Saturn Outlook, it's 16/24 mpg, and for the Honda Pilot with two-wheel-drive, it's 16/22 mpg.
Note that Toyota did not enlarge the Highlander's gasoline tank, so a driver of the new model likely can go only some 385 miles on a tankful.
Last year's four-cylinder Highlander with same 19.2-gallon-capacity tank could travel some 420 miles between fill-ups, assuming combined city/highway travel.
Of course, the gas-electric hybrid version of Highlander gets the best mileage rating -- 27/25 mpg for 2008. Starting retail price, including destination charge, for the 2008 Highlander Hybrid is $34,385.
It took some time to get used to the heft and size of the new gas-only-powered Highlander tester, particularly since the electric power steering in the test vehicle needed only a light touch.
I noticed some body sway and head toss when the vehicle was in curves and on mountain twisties. And with the more powerful V-6, the now 4,000-pound-plus Highlander moves in spirited fashion.
Towing capacity, by the way, has grown from a maximum 3,500 pounds in the 2007 Highlander to 5,000 pounds now.
Don't miss the new nifty features in this SUV, including a narrow middle seat in the second row that rests snugly between the two outer seats to provide a bench configuration. When not needed, however, this middle section can fold and slide forward out of the way under the center console between the Highlander's two front bucket seats.
New safety features include anti-whiplash front head restraints and the latest version of Toyota's electronic stability control.