The speedometer of a car shows its instantaneous speed (as we understand it) and not the average speed. Technically, instantaneous speed is also average speed, but calculated over a very, very small time period. Speed is nothing but a ratio of distance traveled and time taken. Instantaneous speed is calculated by distance traveled in an instant (hence instantaneous), while the average speed is calculated over a more appreciable time period. A quick way to check it is by looking in your car's speedometer very often. You will notice that as we accelerate or decelerate the speedometer's reading changes. Another way to notice this is to drive at a constant speed (maybe using cruise control) for some time and then decelerate (by braking) and check the speedometer. You will notice that from a constant reading, it will start falling down as you apply the brakes, thus giving you a measure of your car's instantaneous speed.
Hope this helps.