Almost all "normal" cars shows the speed from the transmission but that doesn't mean that is the real speed and thats why I am suggesting this. And btw...is not unrealistic to show the real car speed because some cars are showing it using GPS.
I've tested the lfs S1H7 and noticed that the speedometer is showing the car movement speed instead of the wheels speed so based on that I suggest to add an option in the lfs menu to chose what speed to show(real or wheels)