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Look down behind the air filter box. You will see the shifter cable going to the transmission. Under it you will see a black sensor. this is your switch. Remove the cable, remove the electrical connector, remove the switch.
The vehicle you have was made with a start safety switch,, it will only start in Park or neutral, sometimes that switch has just moved with normal wear and tear ,, and can be aligned again, but if its shorted or damaged it will need replacement, its located at the end of the shift cable located on the top of the transmission,
The neutral safety switch is either on the transmission or within the shift mechanism. So if your shift selector is in the steering column it will be there and if it is on the floor look there. It is just a button.
Assuming the engine runs, this sounds like a transmission problem. Check your transmission fluid to make sure it is at the proper level and doesn't have a burned smell. If all is well, you will probably need to have an experienced transmission mechanic look at it for you. Good luck!
transmission range sensor at Ford!! called safety neutral switch at auto parts stores and is the same thing... The check engine light finally came on on mine, after cutting out intermittently for a while; the code was P0708... Mine is a '98 Contour and from what I see is in a similar place...to the left of the battery sitting on top of the transmission with a wire plugging into it. The generic "safety neutral switch" looks a little different in that it is not as much as a "diamond shape" as the original Ford part... but other than that the rest looks the same. I've read on other sites about the O/D light flashing with this problem, too, sometimes.
On Top of the Transmission. You can see the Black sensor just under the
Air Breather Intake assembly in front of the driver side.
It has an electrical wire connection and is bolted onto the tranny with
(2)5/16" hex head bolts and (1)1/2" nut that holds the throttle arm to
the sensor. Very easy to replace.