Why do most cars have speedometers that can go up to at least a 130 when you legally can't drive that fast on the road?

Many years ago. I bought an accidentally fast car. Ford had just updated their 2 litre engine to DOHC in preparation for it losing about 20% of its power as a consequence of emissions adjustments.

Mine had no such emissions adjustments - Ford sold about 2000 of the cars in between the engine upgrade and the emissions changes. So I had about 135 bhp in my little Ford. A car designed to be happy with 90.

After warning my passengers what I was going to do, I maxed it on a German autobahn at about 10 in the evening. The needle got to 137 mph and was still climbing when I had to back off for traffic. Allowing for the 10% "safety margin", we were probably doing about 125. In the next three years of ownership, the needle never saw such heights again, although I did cross the German/Dutch border with 130 showing on the speedo later that same trip.

One has nothing to do with the other.

The speedo is a means of monitoring the car’s performance in real time. Just because the dial reads 130 (or whatever) doesn’t necessarily mean the car can actually go that fast nor that it should be driven that way. In the same way, cars that come with Tachometers often show 10,000 rpm on the dial, but try to rev the engine that high —- no, don’t.

Laws govern how people should use that performance in the interest of public safety, and driving laws aren’t the same everywhere cars are sold.