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This could be 4 things. A faulty thermostat, a faulty instrument cluster, a faulty temperature sensor, or air bubbles in the system. Im ruling out the air bubbles because they should dissipated by now due to your tests drives. Im ruling out the thermostat because you mentioned that you test drove it for 2 minutes from a cold start and it pegged hot. Unless you were mashing the throttle, I cant seem to see how you would reach operating temperature in that short amount of time with current temperatures. Ive seen faulty temperature sensors cause the needles to act up. Ive also seen faulty instrument clusters cause the issue due to the potentiometers going bad. I may be wrong but hope it helps. Let us know when you fix it. Good luck.

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