Newer Version Forester

With $40,000 to spend, you have lots of excellent options.
The top of the line, current Subaru Forester Limited meets all your requirements quite nicely for about $35K.
Same goes for the 2021 Outback - same drivetrain and many other parts as Forester, but more plush and comfortable. Getting a similarly equipped Outback Limited would cost ~ $2K more than the Forester.
Both Subies are relatively reliable, especially in the 1st 100,000 miles.

Another excellent option that meets your criteria would be the 2021 Hyundai Sante Fe. The Santa Fe is also relatively reliable and its warranty is twice as long as most other cars.

Last but not least, take a look at the 2021 Honda CR-V Hybrid. Still in your price range and reliable and it will use about 20% less gas than the others, even more in city driving! Overall the Honda would be the least expensive to own over 5-10 years.

Happy car shopping and please let us know what you choose.

Disclosure: I have owned one Forester (2004) and two Outbacks - a 2010 and a 2015 which I still have. Very few issues and all were covered by new car warranty.
I too am considering a new car and currently the new Outback, Sante Fe & Honda CR-V are all contenders!

I agree with Dan about the Outback vs. Forester. I'd buy an Outback over a Forester. It's just nicer and is a wagon, so it isn't like everything on the road.

The RAV4 Hybrid is another good choice. If you don't need an extremely capable AWD system, the RAV4 Hybrid's AWD system can do 80% of what the CR-V Hybrid can do, but gets a lot better gas mileage than the CR-V Hybrid. Especially on the highway. The RAV4 Hybrid should be the most reliable small SUV on the market. Toyota has over 20 years of hybrid experience and the basic powertrain concept has been the same.

The 2021 Santa Fe looks super nice. Basically looks like a smaller Palisade with the same amount of luxury. It is also available in a Hybrid this year, but reliability might not be top-notch because it is a newer powertrain. However, you get a 10 year/100k mile powertrain warranty so I wouldn't worry about that.

The 2021 Kia Sorento is the cousin of the Santa Fe, seems to drive very sportily, and has a nice interior. Same warranty as the Hyundai, and is also available in a hybrid.

I would get a hybrid no matter what. Unless you rarely drive, it almost always ends up being cheaper in the end. Also, the hybrids typically drive better than the gas counterparts. This is especially true with the CR-V and RAV4 hybrids.

Good luck and please let us know if you read our suggestions!