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the main reason for incorrect speedo readings is the wrong size tyres or rims on the vehicle
for example if you need 185 -75 r14 on the car and you went to 205- 25 r14 that drop of 50 on the side wall height alters the circumference of the tyre so throwing out the speedo
alternately if you had 185-75 r14 and you fitted 185 -75 r16 then again the circumference has altered and so the speedo is out
next is if you changed the final drive ratio in the diff will also cause an error
I had exactly the same problem on my 2001 Focus 1.8.
Solution: a new VSS was fitted (costs about £30) plus garage costs. It is a DIY job if you dont mind getting your hands a bit dirty and should only take 30mins to do.
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