This issue is commonly caused by a worn out or dry lubrication in the speedometer cable. Cheapest and easiest fix it to remove the cable from it's housing, thoroughly clean and relube both parts, if it still acts up, the liner inside the housing is usuallly shot and the cable needs to be replaced. The jumping is what tells you this, a failed drive gear or speedo will usually either just quit working altogether or become stuck.

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Chris
64 190D R.I.P.
80 240D W/617 engine -for sale
82 240D -for sale