Why does the Temp read out only works cold readings and not warm?

The temperature gauge in most vehicles is built into the outside body of the vehicle. It measures cold very well because the temperature is not affected by the heat of the sun. When your vehicle is in direct sunlight (especially in darker colored vehicles), sunlight heats the outside of the vehicle to a higher temperature than the temperature outside actually is. Most of the time once you start driving, you will get a more accurate temperature reading.