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After a garage check on the Transmission of my 1993 Subaru Legacy the speedo has stopped working. I am told that this also controls the Auto selection as well. Could this have been causing a hesitation similar to a fuel fault, the reason I sent it to the garage. They tell me they may have to replace to Speedometer. Is this the case?

If the fault has only occured since the transmission was attended to, it's highly likely they have disturbed the wiring on the speedo sensor on the transmission or damaged the sensor itself. This could be causing other problems such as those you mention, as speed signal is often required for engine management systems etc to operate correctly.