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I had a similar problem on my jeep and it turned out to be the cooling fan, watch it and see if it turns on after its been running for a while. Good luck
Depending on differential gearing, most run at about 21 hundred rpms @65. Overdrive usually shifts in at around 45mph. To see if it is engaged, while doing about 50, lightly tap the brake. That should momentarily disengage the od and the rpm's should increase for a moment. @45, you should notice the rpm drop when it engages initially.
My 97 Jeep Grand Cherokee was doing the same thing. I changed the TPS ( Throttle Position Sensor) Now it is great goes into overdrive fine. It is really easy to change.
Since you have a Laredo this should be where it is going in and out of overdrive. The reason is because 60mph is right at the end of the power range before going into overdrive. The other reason on your idle fluctuation is due to the cooling fan kicking on and off. Higher RPM's occur as the engine is trying to cool back down after reaching optimal temp. I due have a partial solution if you want better performance out of your jeep and will help MPG. You can replace the spark plugs and air filter for both mpg and performance. Local auto store should be able to recommend platnium or iridium plugs for your jeep. But K and N is the best air filter to replace it with. It will cost around 50 dollars but it has a lifetime warranty and is cleanable. If you decide on new plugs make sure to spend a few extra bucks and get some with a 3 to 5 year warranty. Just replace them before the warranty is up. Stephen
If it is automatic transmission with overdrive the lock-up torque converter is kicking in and out causing the rpm to fluctuate.Could be just the converter or maybe the overdrive going out.
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