so to start with I don't own a Subaru yet. I own a 89 vw fox, it is light, nimble, and sips gas. but now I am looking for something a little more practical (wagon), and a little more snow traction (4wd), yet has the same traits above that I liked about the fox. my price range is about $500-$1000 and I am fairly mechanically inclined. so I think I have narrowed my search to 2nd or 3rd gen gl, or 1st gen legacy. I am leaning towards the 3rd gen gl because I want light, 4d wagon, that sips gas(optional 4wd). any suggestions? also suggestions on what to watch out for?

Watch out for corroded radiators. Blown HG's are not the end of the world if you want to make aproject for scrap price.

 

Anything with a broken timing belt sold for junk price is a guaranteed runner with new belts.

 

Otherwise ask when the timing belts and water pumps were last serviced. Expect to do *some* work on the car if you want to depend on it. The bonus part of that is the car is straight forward to work on with simple tools.

I am now thinking that I might want to save for a couple months and get a good gen 1 impreza for 2 grand. that newer engine sounds very reliable. your thoughts?

REally depends on what you want to pay for. The impreza is more universal as far as random subaru parts fitting on it. The EA82 subarus will give you the option of dual range transmission and are much lighter.

 

Either car is going to require the same maintenance as far as coolant and water pump and cam seals, etc. You will want to know what service has been done if possible.

imo if your looking for a cheap utility car, cheaper is almost always better.  cheap cars are rarely sold because they are perfect and need nothing.  having money left over is worth more than anything that was done to the car, since they always need something.  if its solid then you can always spend it on something else.

 

on any subaru, id make sure to have the money to replace at least 1 or 2 CV's.  once they are fixed right they are fine, but lots of them get sold because of the CV's, and the pita that the aftermarket CV manufacturers put us through.  

 

in general I plan for enough money to do the brakes completely on any car.

 

if you look at a gen 3, make sure the heater works perfectly or pass on it.  don't get stuck with a blown heater core in those things.