Well, i see people being told this when they expirimce some bugs in there game. I've had no bugs yet so I'm wondering, should I clear mine. And how do i do it?
To Clear Cache: Options > Scroll all the way down > Utilities (or the GT logo) > Clear Cache. Think that's the directions.
You should only clear the cache when you start to experience strange problems whilst online, like constant disconnections. Or just to be on a safe side, every 2 days or so. It can also help on some offline problems, as well.
Clearing your cache speeds up your loading times. I don't think it has anything to do lagging in a race, that's more like an issue with your connection. (I think)