In auto racing, a caution period is issued by the race director when a hazard is on the track that could pose danger to the competitors. This could be a wrecked car, large debris, fluid sprayed onto the track by a car, or inclement weather in some cases.
A local caution is one that affects only the section of track where the hazard is located, with a track marshal waving a yellow flag to warn drivers. No passing is permitted in this zone, until drivers have cleared the hazard and/or passed a marshal station displaying a green flag to indicate the end of the caution zone.
A full-course caution is used to slow the entire field and bring them together in a pack behind the safety car, so that more serious incidents can be properly cleared from the track. In oval racing, full-course cautions are always used instead of local ones.
NASCAR's "Green-White-Checkered" Rule
In NASCAR, if the race is still under caution with less than two laps to go, the race distance is extended. Once the caution ends, the green flag is waved, and competitors will race for two full laps. If the caution comes out again before the leader starts the final lap, NASCAR will try again to have a green-flag finish, up to three attempts. However, as soon as the leader starts the final lap on any of these attempts, any further caution flag will effectively end the race.