Which parts fail
Components named in complaints (engine, cooling system, oil leaks, timing chain, exhaust).
Mileage when the problem started
Owner reports
Selected complaints filed with NHTSA by 1998 Subaru Outback owners, lightly cleaned up (personal details are redacted by NHTSA).
1998 Subaru Outback showed signs of overheating as temperature gauge rose up past the usual midline and cold air inside car from air conditioner suddenly got warmer. I pulled over and coolant was over flowing from overflow reservoir through the cap. I drove with the heater on full power and made it to a repair facility and remove the thermostat which had seized. Replaced the thermostat and radiator cap ($30) and everything was fine until four months later (March 2004) when car showed signs of over heating again (rise in inside air conditioned air temperature from cold to warm). Took car to rallysport engineering in costa mesa, ca and mechanic could not find symptoms of head gasket failure although this is what he thought it was. …
Engine overheating started 10 months ago on long trips only. Overheating was common when engine was under heavier than normal loads for long periods of time(climbing hilss, etc.). Fluid in radiator was eventually deplented leading to sharp rise in engine temperature. Lately this has been worse as only 30 miles of normal driving will cause the same symptoms. The fault turned out to be a head gasket failure on Subaru r2.5l type 1 engines. The coolant was being forced out of the radiator by the slow leak of exhaust gases in the coolant around the radiator. This vechicle has been serviced since new by only the local Subaru dealer. A search on the internet for Subaru 2.5l engines 1996-1999 (legacy) turned up multiple hits for owners with this same problem. Failure is as low as 40K miles to over 100K for the same problem. …
Cylinder #4 exhaust vale failure in July of 2004. Subaru dealer prestige imports pulled head and replaced valve. They insisted the cause was "bad gasoline." April 2005 car is found to have high level of co2 in cooling system. Subaru dealer prestige imports refuses to do a leak down test to determine which head gasket has failed. Pulls both heads at a cost of close to $3,000. Refused to acknowledge that they removed the head in July 2004 to replace the valve and refuse to acknowledge that this May have been the cause of the July 2005 failure. Told me "we've seen this before." refused to call Subaru USA because "they would just laugh at us." in a meeting with prestige imports GM jim borreli he indicated that this is a common problem and promised to contact Subaru USA he never did and would not return my phone calls. …
Late on the night of 09/01/05 my wife, her son, daughter and two (2) grand children were traveling to omaha, ne for the long labor day weekend in a 1998 Subaru legacy Outback wagon with 123,000 miles. They got as far as the outskirts of kearney, ne when they noticed a loss of power and saw heavy smoke/steam coming from the tail pipe of the car. They immediately pulled over and were assisted by a ne state trooper. $600 later the car, which apparently suffered from head gasket failure, was finally towed to the duteau Subaru dealership in Lincoln, ne. They verified the head gasket failure and that the engine seized. Subaru USA was notified and asked if they would cover any of the damage, which as it turns out includes a new/rebuilt engine. …
Catastrophic failure of a major engine component which is considerably outside the expected statistical failure rate(based on my research of complaints by other purchasers of this model Subaru automobile), resulting in significant costs to repair. At approximately 56000 miles the head gaskets on my 1998 Subaru Outback with the 2.5l engine failed.the cost to repair was $ 1880.00. I contacted Subaru in an effort to get them to absorb at least part of the cost since the car was well within the mileage warranty period, but was slightly outside the time warranty.their response was sorry tough luck. I indicated to Subaru that a component of this nature with such a high failure rate, was obviously due to a significant design or manufacturing defect.their response was, again, they were not goint to do anything about it. Someone needs to put pressure on Subaru to make this a recall item.
Legacy Outback with 2.5 l engine began to overheat with coolant boiling over into resevoir. The car was taken to repair shop. They replaced thermostat, tested for hydrocarbons in system, pressured tested cap and system and flushed radiator. Car still overheated and was returned to repair shop and tested for hydrocarbons in the antifreeze with negative results. No problem was identified. Engine continued to overheat and was taken into repair shop while the pointer was off the top of the temperature gauge. This time hydrocarbons were identified in the coolant and problem was identified as a blown gasket. Manager reported that the week before another Subaru owner had the same problem with same difficulty in identifying the cause. Repairs cost $1,400. Had a similiar report for another Subaru owner but work was done with pressure on dealer after initial refusal.
My Subaru Outback has dripped a little oil from the front ever since I bought the car new and had a burning smell. I took it back 2 times in the first year but they didn't do anything except tell me it was transit paint burning off. I took it back when I was 1000 miles out of my warranty because it was worse and smelled burning more. They told me it was the oil pump seal but wouldn't cover it under warranty. They said if I had been having regular work done through the dealer they might have been able to work something out. Since then it is worse and the burning smell is very bad. I know of 2 other Subaru legacy's with the same problem and a $500 to $700 fix. I was also told by a mechanic that there have been some fires in subarus due to this problem and dripping on the catalytic convertor.
I own a 1998 Subaru Outback.: VIN #[redacted]. On the date below, the timing belt on my car, which had 53 thousand miles on it at the time, broke and resulted in a catastrophic engine failure. This forced me to buy a used engine. Fortunately, I was only driving at 20 MPH and was able to safely pull over. Had this happened at interstate highway speed the result might have been very different. Subaru's own maintenance schedule says that the timing belt should be inspected at 60 thousand miles. I've been in touch with the company but they don't seem to be very responsive or forthcoming. Thank you for your attention to this matter.
Head gasket on my '98 Outback failed. Dealer said not uncommon. He has 3 more waiting for head gaskets. Seems a number of head gasket failures on the Subaru discussion group on edmunds.com townhall. Fortunately, mine was discovered with no engine damage. The cost of repair was $2500.00. Quite a financial drain for me. Some talk on discussion group wondering if a design problem with the 2.5 liter engine. Subaru emailed me that there is no problem with head gaskets and that all mechanical things fail with time, some sooner and some later. On the Subaru discussion group, a number of the head gaskets were at low mileage. Mine was at 94,000 miles
We bought a 1998 Subaru Outback in 2004. At approximately 110,000 miles, we experienced a catastrophic overheating of the engine due to a faulty head gasket. The overheating caused approximately $3,000 worth of damage to the car. The head gasket, radiator, thermostat, water pump, oxygen sensors and (2) catalytic converters all had to be replaced. We have since learned that this is a common problem for subarus of this vintage. There are hundreds of anecdotal reports of people having this exact problem on the internet, and our mechanic tells us he fixes at least one of these problems per week at his shop. Clearly, this is a defective product.
Engine complaints in other Outback years
Frequently asked questions
How common are engine problems on the 1998 Subaru Outback?
NHTSA has 40 complaints about the engine & cooling of the 1998 Subaru Outback, 31% of the model year's 127 complaints. The component named most often is engine (18 mentions).
Is there a recall for 1998 Subaru Outback engine problems?
No. NHTSA lists no engine & cooling recall for the 1998 Subaru Outback, though it has 2 recalls for other components. If the problem is widespread, a repair may still be covered by an extended warranty or a manufacturer service bulletin — ask a dealer.
At what mileage do 1998 Subaru Outback engine problems start?
Half of the complaints with a recorded mileage happened before about 95,000 miles, and 4% before 25,000 miles.
Source: U.S. National Highway Traffic Safety Administration (NHTSA) — owner complaints through October 20, 2026, recalls and defect investigations; fuel economy from the EPA. Complaints are unverified reports and are not proof of a defect. How we rate model years.