The fuel gauge in my 1996 XJ reads empty when it’s not even close to empty. If I pull out the sending unit and move the float around it gives accurate readings as long as it is outside the tank, but goes back to empty when I reinstall it. Sometimes it reads full when the tank is full, but goes to empty when there’s still 10-15 gallons left. Right now, the tank is completely full and it reads empty with the low fuel light on. I already replaced the sending unit with a new one and the behavior is exactly the same. The only thing I can think of is the floats don’t float in a modern gas/ethanol blend. Has anyone encountered this? Any ideas on what the problem is?

 

Maybe the float has a hole in it, and it's sinking. Take it out and manipulate it manually and all is good. Put it in the tank and it sinks.

But if the sending unit is new, doesn't that include the float? That would kinda shoot my theory down in flames.....

Check your ground. See my sig, #1. There's a link there to pictures of the various ground locations. I think the fuel tank ground might be in there somewhere.

Or maybe you have a clearance problem for some reason, and the float can't float?