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In Spanish, "caro" means "expensive" or "dear" when referring to a person, while "carro" means "car" or "cart." The difference lies in the meanings and usage of the words. "Carro" has different meanings depending on where you are.
In IberoAmrica, carro is the most usual, because of the translation of American/English car. In Spain, its usual using the term coche, and more formally auto, for automvil. Carro is used for the traditional two/four-wheeled, even smallsized, vehicle, not auto propulsed, moved by animal or human physical force.