Toyota Repair: Check engine light - 94 toyota camry - code 0500 &0720, vehicle speed sensor, camry v6

Question
Hi ted,
I have a 94 camry V6 and the check engine light comes on and off the power light and the o/d light also goes on and off. I also have a problem with the car not going into o/d when cruising on interstate, if it does, then it would go back and forth between the over drive and the lower gear. the rest of the gears work fine. this has been happening for about a month. PLease do let me know if it could be just a sensor or what could probably be wrong with it. the OBD codes are 0720 and 0500.
I also want to know if it wld hurt if i dont do anything about it? Dont want to spend the money right now if i dont have to. Thanks ted for the great work.
RN

Answer
Both trouble codes refer to the vehicle speed sensor.
There are two possible areas of trouble but the most common is the speed sensor in the transmission, it's located on top of the differential and easy to identify, there is another sensor in the speedometer that receives the signal from the transmission sensor and makes the speedometer move and sends a signal to the ECU, the check out procedure is extremely involved and requires an shop manual and a multimeter which may cost more than it will to have the dealer diagnose the problem or to just replace the sensor in the transmission which is what I'm going to rercommend since it is the most common cause for this. Go to the toyota dealer parts department and buy the speed sensor in the transmission and install it, it will most likely fix the problem.