My 1990 325 has a factory outside temperature display/date/digital clock in place of the analogue clock or OBC. It has always been highly reliable and accurate since I bought the car 17 years ago but recently it is showing approx 10C below the actual temp. Anyone know where the sensor is and if they are prone to any faults of this kind?
It's either a thermistor or a thermocouple (the former is my guess), and these devices can fail in such a fashion that the resistance they attain at a certain temp is incorrect. The circuits they are in are prone to reacting to corroded connections too. As a general rule, the resistance they have is higher at cold temperatures, so corrosion on the contacts can lead to lower readings on the display.
A thermocouple and a thermistor behave similarly, although they achieve results in a different manner. I do not think it is important which device is used in your car. I think your problem is either a poor connection due to the location of the connector, or the device itself is failing. As was pointed out earlier, they generally are a go-no-go kind of device, so paly with the connector for a few minutes, and replace the device next week if it still does not read correctly.
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