l have a 2001 Subaru Outback 4 cylinder with 103,000 miles and it consumes 1 quart every 3,000 miles. No oil leaks are visible on the engine or in the driveway.What kind of problem do you think lhave?
At 105,000 lam planning to change the timing belt and water pump.Now, I am thinkingl shouldhave the head gasket and seals changed or should l get a new engine?
What is your option?

You could be burning oil past the rings or around the valve seals. l would say that a rebuilt engine would be the sure fix.

You do not need a new engine per se. Get your engine strip cleaned and change the head gasket and seals as you said.

If the engine is not running smooth, you might wanna consider blue printing, port and polish your block and valves.

At 105K miles, you might wanna change your engine mounts and cat converter too so your ride is quieter in the cabin.

Some oil use is normal once u get around that mileage, but head gaskets r a problem with those 2.5 is as well as the separator plate (which is an approx 3''X4'' plate located on the rear of the engine, behind the flywheel/flex plate on the passenger is side). Subaru went to a plastic one for a few years.they pretty much all leaked so they went back to metal around '04. The oil will then drip out between the engine & transmission, & due to its location directly above the exhaust will be burned away immediately. It has to get pretty bad before u notice any smoke, & you're at the age/mileage when they usually begin to leak. You have to pull the engine to get at this plate, l would put the updated one in & throw the re-designed head gaskets on too. Along with the timing belt, water pump, thermostat, & new radiator cap.

cheapest way to see what the dilly is: pull the spark plugs and read them. you can tell if the engine if burning oil by looking at the electrode area of the plug.

if it is oily or caked up, you have one of two problems: valve stem seals or Piston ring blow-by.

piston ring blow by can be checked with a cold and warm compression test. if the compression test passes, you have a valve stem seal issue.

It is probably something to do with rings or a head gasket. There are other seals that could be leaking but those would most likely leave some marks on the ground.