If your speedometer jumps all over it could be a problem in the car with the Vehicle Speed Sensor, called the VSS for short. This device sends pulses to the speedometer head (and cruise control) when the car is moving.
For cars with cruise control you can try a simple test. If your cruise control works it means the VSS is ok. Most likely it is the speedometer head, but could be the wiring from the VSS to the speedometer head. For absolute proof the car should be jacked up and the wheels turned while viewing the VSS input signal with a scope at the input connector to the speedometer, but nine times out of ten you have a bad speedometer. (On some cars a voltmeter will work. Just look for a fluctuating voltage on the VSS output when the wheels are turned.)
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