....this happened to me one with an E30....I think the E34 is the same. The speed sensor plugs ito the rear diff and counts the crown wheel teeth (or some other feature). The most likley cause of your problem will be a broken wire. Either the wire insulation has cracked (where the exposed wire goes into the sensor) causing the copper to corode (difficult to spot) or the wires broken near or above the rear axle.Timon said:It seems that my speedometer has been possessed by demons. I don't know if I tore open a gateway to Hell driving home last night, but I now have one of its former residents riding shotgun. The needle just bounces all over the place. Sometimes it works for a few minutes, but not long. Is my cable bad, or just loose? Any ideas? I will try Holy Water tonight just in case.