I masked off the Mountains, some fine tuning was done later.
step 7 of 15
I inserted the town, on a layer below the supplied image. I have enhanced the colour of the sky and blurred it a little.
step 8 of 15
Added the children on a new layer at the top.
step 9 of 15
I added a shadow for the children below the previous layer. I did this by selecting the children, on a new layer I filled the outline with 50% grey set it to multiply, pulled it into shape and added some gaussian blur.
step 10 of 15
I used a gradient to create the rainbow
step 11 of 15
I deleted most of the gradient.
step 12 of 15
I bent it into shape using free transform and warp
step 13 of 15
Put the rainbow where I wanted it, reduced the size, blurred it and lowered the opacity.
step 14 of 15
I added the car, flipped it horizontal to mach the light direction, lightened the shadow, I had copied the number plate before I flipped the car, now added that in place.