I just fixed this on my car. You need to change the gear that goes into the transmission at the end of the speedometer cable. Mustang parts places sell them. I bought mine at the Ford dealer, but I have a T5 transmission from a newer car, I don't know if Ford still sells these parts for the older transmissions. The easiest way to determine the number of teeth you need is to get on the freeway and drive a CONSTANT indicated speed and measure the time it takes to go one mile. I used the mile markers that are on the side of the road. Use the time for a mile to compute your actual speed. For example if it takes 62 sec to go one mile then your speed is 3600/62 or 58 mph. Now pull the gear from the transmission, one bolt and a clip, and count the number of teeth. Multiply the number of teeth by the indicated speed divided by the measured speed to find the number of teeth you need on the new gear. For example, if the indicated speed was 50 and the measured speed between the mileposts was 58 and your current gear has 20 teeth, then 20*50/58 = 17.2 so you need a new gear with 17 teeth. Nothing to it!
