How would you go about redirecting something like this: abc.com/cars (that entire directory and all pages within it) to: xyz.com? I'm having a hard time understanding which of these 2 sites' HTACCESS files will have the actual 301 statement (or will both?)
Here is the answer to the easy part of your question: You only need to add the redirect to the .htaccess file on abc.com. This redirect does involve the .htaccess file on xyz.com.
2 ways, either you can do it using .htaccess. Or put an index.html or index.php inside the cars directory and then using <a href tag, you can set a redirect to xyz.com