[Sean_D]

.. and supposedly in the US a 1997 Federal Standard allows for a 5% error, but aftermarket modifications such as tire sizes, wheel sizes, different differential gearing can cause further error.

Also apparently there can be variances plus or minus due to tire wear and tire diameter variations from temperature, tire pressure, weight load, etc.

As far as GPS goes, they are by no means 100% accurate either. Wikipedia has the following to say about GPS accuracy:

“As the GPS is an independent* system, its speed calculations are not subject to the same sources of error as the vehicle’s speedometer. Instead, the GPS’s positional accuracy, and therefore the accuracy of its calculated speed, is dependent on the satellite signal quality at the time. Speed calculations will be more accurate at higher speeds, when the ratio of positional error to positional change is lower. The GPS software may also use a moving average calculation to reduce error.”

I wouldn’t necessarily depend on GPS reading as a source of determining speedometer error. In some cases your speedometer may be the more correct.