I'm currently experiencing erratic and inaccurate readings from my coolant temperature gauge in my '84 300SD. Our problems probably point to the same thing - the sending unit. Afterall, these are 18+ year old cars. Since we are running on the original units, I wouldn't be surprised if they are all faulty. But who knows.

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1999 Mercedes-Benz S600, 103K miles - garage queen
1988 Mercedes-Benz 560SEL, 89K miles - daily driver
2007 Hyundai Sonata Limited, 31K - daily driver