Check other boards regarding engine smoking. It may be due to worn valve guides. Sometimes Barr's Stop Leak can help control this. I have a 91 that I had this problem corrected with a valve job.
I agree. Tercels of this year are not very reliable. I have a 4 door model and I discovered that a '96 tercel spoiler and '85 mr2 rims fit very well and look nice. the car no longer looks cheap, but it runs cheap. The head gasket is blown and it uses a quart of oil per 200 miles. I tried "Block Seal" to help the head gasket and it worked (for now). I replaced all of the engine seals and gaskets. The car used to consume 1 quart of oil per 50 miles until I replaced the seals. I also own a mr2 that uses more oil than gas. My daily driver is a 1986 Chevy s-10 that NEVER leaks oil or breaks down. Toyotas made from the mid 80's to early 90's aren't that great. I love my s-10, because 1986 was the best year for s-10 (large main bearings, fuel injection, cast iron heads, larger valves, one piece main seal, etc.). I do love my Tercel also. With the rims and spoiler, it looks like a brand new mid-priced sedan, rather than a boring cheapo '91 Japanese econobox. I do like the interior. It looks like it belongs in a higher priced sports car. The only real complaint I have is that the steering wheel should come out farther, but that would ruin the looks. And in a fashion conscience world, looks are more important than comfort.
I think it would be best to look at the seller. No car is going to take being thrashed. This is why I am looking at a Tercel instead of a Civic or CRX. Honda's are excellent cars, but the kids are raggin em out to the point that buying one used without a close inspection is very risky. I am choosing to bypass all of it (Honda's are thief magnets-the CRX especially) and go straight to a Tercel or Metro-I need high MPG in this next car I buy.
Bottom-line: Toyota makes very good cars. My experience leads me to value them at #1. Honda, a close second. If you got a lemon, it is much more likely that it is due to the previous owner's driving habits. I've met quite a few people/students who don't take as good a care of their cars (oil changes, etc,)as they should, but they don't abuse them and they speak very highly of their Toyotas and their dependibility.
Our 94 Tercel now has 191,000 miles on it. We've had it since 120k, and it has been exceedingly reliable and efficient (35-40 mpg) At around 178k, it fouled the plugs and started running very rough. One mechanic pronounced it dead. Another recommended flushing the engine, changing the plugs, and running Lucas Oil stabilizer with the oil (there are other brands that do the same thing; they're basically very high viscosity; they flow like cold honey).After taking the 2nd guy's advice, it's now at 191,00 and seems to run fine, even though 2 cylinders have low compression. Too bad the previous owner (a family member) didn't check the oil in between oil changes; it had been run very low on oil on numerous occasions.