Getting the most cold air into your engine as possible is an important ingredient in the performance recipe. This is because cold air is has a greater density than warm air, meaning that it contains more oxygen than the hot air in the engine bay.
A cold air intake is intended to replace the factory air filter, intake piping and air box. The air box helps protect the filter from getting dirty, but it also limits the surface area of the filter which can be exposed to the air. A cold air intake usually uses a cone filter which is not enclosed, which permits airflow from every side of the filter.
Cold air intakes can be placed inside the engine bay, but only if steps are taken to protect it form the heat of the engine itself. This can be accomplished by making a small enclosure which seals with the hood and ensures that the filter stays insulated and only uses the outside cold air. It’s important that the intake have a directed flow of exterior air in order to take maximum advantage of the external air’s temperature. It is possible to install the intake outside of the engine bay, usually low to the ground behind the bumper or fender. This can be effective, but carries with it the risk that extra dirt or water will clog the filter or make its way into the intake. Filter placement is something that should be carefully considered when installing a cold air intake.