My 240D speedometer would read 60 and I would be traveling at 56. My 300d would read 60 and I would be going 65. The actual readings are taken off my GPS with the cruise on, set at 60 mph. The 240d tires are 185-70-14. The 300d tires are 215-70-14 (are a bit oversized from stock) Why such a large difference, 9 mph?

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'83 240D 264k on 100% biodiesel/ 31mpg
83 300D 217K the $800 gem
'82 300D 267K the new WVO project car finished and driving for free
International tractor B275 on B100
Ford 555 backhoe on B100
Sargent 25 ton Rough Terrain crane on B50

the the larger the tires the slower the turning speed. meaning the spedo is reading correctly for the tires you put on them.

I think you have it backwards. Larger tires mean you are moving faster than what the speedo says. The circumfrance of a larger tire is more than a smaller tire. So one one revolution of each the larger tire will go farther than the smaller tire. So you are moving faster with larger tires.

The stock tire size for these cars is 195 70 R14. So that would explain why your 240 is going slower than the speedo and the 300 is going faster. The 240's tires are smaller than stock and your 300's are bigger.

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According to this tire size calculator, your 240D tires are about 2.2% small and your 300D tires are 4.5% large, resulting in corresponding speedometer errors:

http://www.miata.net/garage/tirecalc.html