new guage

Those Equuis gauges are not the greatest, you will find the the fuel gauge will fluctuate, more so when the fuel sloshes around in the tank.
Anyway if your going to do it I would splice the gauge somewhere around by the kick panel, and leave the remaining blue wire behind the panel so if you want to use it again to return stock you can. It will be dead anyway.
Did you check to make sure the sender is working ok/
AL