They suck.
I know, everyone I know tells me how what great cars they are and how they are so reliable. That has simply not been the reality with my 1998 Legacy Outback wagon.
I kept up with my service, in fact I had very recently sent it to the dealer for it's 60,000mi service. I was driving on a freeway in the middle of oregon when it suddenly overheated. It was staggering how fast, I actually didn't believe it at first. I pulled over at the next exit (there was nowhere else safe to pull over) and it died on the exit ramp, never to start again.
The subaru dealer, who had just taken almost $1000 of my money, offered to fix it for $8000. Yes, you read that correctly, eight THOUSAND dollars to replace the engine. Apparently, not only do they overheat immediately when low on fluid but the heads warp, the valves need redone, and the cylinder sleeves crack rendering the entire engine unusable.
Subaru, being the helpful bastards that they are, offered to sell me a new subaru instead. I declined, and had the lump towed to a mechanic that I actually trusted who replaced the engine for $3000.
That was a few years ago, it's been running fine until 2 weeks ago. This time we know why it overheated at least---a radiator hose burst. (Last time neither the dealer nor my mechanic could explain why it suddenly overheated). My wife was driving uphill and had the presence of mind to pull over immediately after seeing the check engine light flashing and the temp rising. For her reaction time she managed to spare the cylinder sleeves from cracking, but the heads were damaged, head gaskets blown, oil in the radiator. The price? $1500. We lost $1500 in two minutes.
I'll say it again, Subaru sucks.
Now, I know, many out there think they are wonderful. And I've come to find out that this particular engine (2.5L V6, 1998 model) has 4 cams, a design which came out in 1998 and disappeared in 1999. Apparently, the reason they ditched the design was because it was a reliabilty disaster. So perhaps it's just this particular engine. If so, you can safely disregard my experience.
However, you may want to compare the price of subaru parts to the price of parts for your second alternative. It may be illuminating.
Just my $0.02.
-kev