I have had an '03 Subaru Legacy "L, Special Edition" wagon for one year now. When I was shopping, I thought I would buy a Forester. I also spent a lot of time driving Passats, because that was the closest competitor.
The truth was, we really liked the Passat... a lot. The interior was very nice, well thought out. Definitely more "upscale" then the Legacy. After doing research on reliability, even though the Passat had free 2 years maintenance, we decided it was too risky, since we keep our cars forever. Also, our mechanic who we've had for many many years only works on Subaru, Honda, and Toyota. Yea, I know, a bit silly, but so be it.
The Forester was a nice vehicle... but it seemed light and tippy compared with the Legacy wagon. The Outback, though nice, didn't handle very well. The Legacy Wagon handled well, though not as well as the Passat.
Another consideration is cost. You can get a Legacy wagon for right around $20k. That won't get you into a new Passat at all. You really need to spend more like $25k to get a Passat that compares feature-wise with a Legacy (though, again, even the base Passat has a better interior than the Legacy). I don't think you can get an AWD Passat for under $25k... at least.
I thought about going up to a "GT" model, but the upgrade wasn't worth the extra cost to me. My local dealer did offer a $1k option for leather, installed by a local shop (workmanship was very good, I saw a few examples). But we decided against it.
Anyway, that's my story... I'm a happy Legacy L SE owner.
Oh, one more thing... once you get close to $30k, you're starting to get into Volvo v70 territory... IMO, that's the vehicle I really wanted, MUCH better than the Passat. I just didn't want to spend that much.
