This happens in my C280 occasionally, but it works most of the time.
There are two senders in the tank that come out through access panels underneath. Unfortunately, I believe the senders are a dealer only item, as the last time I checked, Fastlane was unable to order or stock them. I checked with my local dealer, and I think the quote was around $170 or so for both of them. Both must be replaced at the same time.
I also noticed that the fuel gauge seems to act up whenver the tank is filled a little more than initial cutout of the fuel pump during fillup. When I am not in NJ and I fill my own gas, I stop when the pump first cuts out, and find that the fuel gauge seems to behave itself most of the time as long as the tank is not overfilled.
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