Speedometer error - help!

I had the occasion over the weekend to pace my '01 740i w/sport behind my Volvo. Set the cruise on the Volvo dead on at 70 and the BMW read 75. Volvo spedo accuracy confimred by dashtop Garmin GPS. Kicked it up to 80 in the Volvo and the BMW read 87mph. So, now I know why I feel like I keep getting passed all the time when I "think" I am going pretty fast in the BMW. Is this a known problem? Can it be corrected in the computer? Is something just programed wrong? Please help. Thanks.

Do you have stock wheels and tires? If the overal diameter of the wheel/tire combo is different from stock you will have a speedometer discrepancy. I've heard there is a correction in the computer system for this problem. Try www.roadfly.com at the relevant board for your car.

If you have stock wheels/tires then there must be something wrong with the speed sensor and/or the interpretation of the speed sensor data. My guess would be the speed sensor itself.

Also, check your owner's manual. I think on these later model 7s you can reset your computer, which might help.