Here are my observations and experiences with the "Neutral Switch" on Subaru's I service.
On the Automatics, The neutral switch is not only used for closing the contacts to the start solenoid, but also is in the Cruise control circuits. So if driving along with the cruise set, IF the shifter is moved ( accidentally or on purpose ) to the neutral position, the cruise disengages. Many many times, someone can NOT start the car ( starter not turning while in Park ), but it WILL start in Neutral. Switch defective and must be replaced. There IS a procedure on the Automatics and not doing it properly may put the Shifter and Tranny out of sync ..... commonly, you may not be able to place the tranny in Park. It also inputs to the ECU to control Idle when the shifter is in Park or Neutral positions.
XT Manual ..... Here the switch serves 2 purposes .....first control engine idle by inputting to the ECU when you are in Coast mode ( slowing while in gear ) VS Idle mode, ECU now must manage the idle speed by controlling the IACS ( Idle Air Control Solenoid ). And secondly it IS in the cruise control circuit. So a faulty switch can cause a car NOT to maintain cruise engagement. When the cruise is engaged, just touching or moving the shifter the slightest bit while still in gear causes the cruise to disengage.
NA Manual ...... Here it only has 1 purpose ...... to control engine idle by inputting to the ECU when you are in Coast mode ( slowing while in gear ) VS Idle mode, ECU now must manage the idle speed by controlling the IACS ( Idle Air Control Solenoid ). It is NOT in the Cruise control circuit at all !!!! Here they rely on the ICE-SLIP mode of the cruise to disengage it. ( If the engine RPMs raise abnormally fast as if the car is slipping on ice, OR moved out of gear, the cruise will automatically disengage ). A defective OR worse yet INTERMITTENT switch can cause BAD Erratic Idle ( P0506, P0507, P0519, P1507, P301/302/303/304 all together ) or maybe NO code at all. This can happen randomly, when COLD, WARM ..... anytime.
The Neutral switch input is used in BOTH Open and Closed mode.
It can also cause a slight "lurching" when coming off and on the accelerator.
Remember this is ONLY on the manual transmissions.
Now to diagnose a problem. IF you have a code you should still go through the flow chart. If everything checks out AND you have a Manual Transmission, then I would suspect the neutral switch. If you can find a scan tool that will give you live data on the switch you can put the transmission in gear and watch the on/ off signal while you gentle move the shifter in gear. If you do not, you could try unplugging the switch, attach an analog ohm meter and watch the needle for fluctuations while gently moving the shifter in gear. There should be continuity when in gear, NO FLUCTUATIONS WHILE MOVING THE SHIFTER IN GEAR, and open in neutral.
On the N/A Forester, this is the 2 wire BROWN plug just below the air filter housing on the passenger top side of the bell housing. I use 3M wire splices to CLIP my meter leads to the wires just to the rear of the plug. The internal pins are small and are impossible to attach meter leads.
The switch I took apart had a small membrane between the plunger on the top of the switch and the contacts. That membrane was breached and damaged, so the seeping transmission fluid was not always allowing good contact.
Replacement on the Manual was easy ...... no need to drain the fluid. Even though open to the inside of the tranny, it is above the fluid level. It also comes with a new copper seal. On the XT, it is part of the Reverse Lights/ Neutral switch assy, SO if using a factory part, you will replace BOTH switches. There are those who bought a single switch and spliced/soldered just the neutral switch back in place.
These is my knowledge and observations of this OFTEN overlooked part, feel free to
add to this.
98S, 2014 Impreza 5 dr Ltd (9 Subaru's since 1978, 7 were 5 sp) ILuvSubaru's