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It sounds like a sending unit/wiring failure. Is the cruze control broken too? The sending unit is on the differential. The best troubleshooting source for 940s is the brickbvoard. Go here for spedo problems. http://www.brickboard.com/FAQ/700-900/ElectricalInstruments.htm#Speedometer_Failures

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Q: How do you repair speedometer and odometer in a 1993 Volvo 940 they both simultaneously quit while i was driving down the road.?
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