In an elastic collision involving two cars pushed apart by a spring, velocity is not conserved, but momentum is. Before release, both cars are at rest, resulting in a total initial velocity of zero, which changes after the spring's release due to the different masses and accelerations of the cars. The conservation of momentum principle states that the total momentum before and after the collision remains constant, while the velocities can differ based on mass. The discussion clarifies that while the sum of initial and final velocities is not conserved, the relative velocities are reversed during an elastic collision. Understanding these concepts is crucial for accurately analyzing collisions in physics.