kinda both, typically I use the two layers/two color cars and cut out the top layer, but for this one the decal was made (by tracing the real thing, but still had to be made), put into postion, then the reflections are clone stamped over the decal, then faded in with opacity/fill and eraser.
With most pictures you can change the hue and color easily, but the problem with black or white is you can't really add much color without a lot of defects. So the red decal had to be made, and then fake in the shine/reflections.
Really not too hard, you're really just mimicking the shading and shiny areas of the car over the decal. In all honesty this one looks like crap up close. But I look at it on flickr in a 23" 1920x1080 monitor about a foot+ away, and try not to get too nit picky
I also openly share my PSD files, just PM me and I'll see what I can do.