Actually I was getting ~34 on the highway on a trip to newyork.I hit ~285miles on ~8.5 gallons of gas. And the first 25-30 miles were around town miles. I was also going 70-75mph.
35mpg is well within reach. Maybe not all the time, but on highway portions. City mileage will probably always remain around 20 because of the AWD. And disabling the AWD is NOT healthy for the components of the car. The AWD Fuse is actually for towing purposes or flat tires. The car is designed to operate at a 50/50 split in first, and normally 40/60 or 20/80. Putting all the strain on the front differential will cause premature failure. The gear rings are only about 4" on a subaru, and they are not intended to use put up with all that abuse. At least those built for the outback.
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