euryale1 said "Then hope your state has a 90 day lemon law."
What states have a 90 day "lemon law" for used vehicles? The federal lemon law only applies to new vehicles, and then only if certain conditions are met. AFAIK it's caveat emptor on used cars.
Put the $1300 in the bank. Chances are you won't use all of it on repairs in the next 36 months or 36,000 miles. It is a Subaru we're talkiing about here.
As far as the extended warranties go, I'd take a pass. My customers' experiences with aftermarket extended warrnaties has never been good. The Company is SCM of Wilkes-Barre PA.
Example one: Contour blew a head gasket. The waranty company was wiling to pay for the head gasket and its installation. They would not pay to have the cylinder head planed so that it wouldn't blow again (until after the warranty expired). The Customer opted to buy a new timing belt as the labor to install it had to be performed to R&R the head.
Example two: 2000 Mitsubishi Galant blew a head gasket. The warranty company's "adjuster" determined that the electric radiator cooling fan was not working causing the engine to overheat. Never mind that it was January and the gasket blew during a long highway trip when the fan was NOT needed to keep the engine cool. They offered to pay for a new fan motor.
Example three: Chevy Venture van. Blew a headgasket and lost all coolant very quickly. The company offered to pay for new headgaskets, but that didn't fix the problem as the engine was toast. They blamed the owner for continuing to drive when it was overheating. The owner paid for a used engine to be installed and threatend to sue the insurance company. (That's what these warranties are is insurance policies.) The company has an army of lawyers. The individual would have had to spend more to bring a lawsuit than the engine replacement was worth.
I could go on. I know of several others.