Firstly your going to need two images, one of the car and one of the engine, i shall be using these two pictures.

Open your images up in photoshop, copy/paste your engine picture on to your car picture.
If your car picture is overly big re-size it using “ctrl + T”. Resize it to fit the engine bay, you also might need to change the perspective/angle, if that is the case goto “edit > transform > perspective”.

Once you have your engine picture at the right angle and is in postion duplicate your actual car image and drag the layer over your engine picture. Your layers pallete should look like this.

Now add a layer mask to your top car image.

Select your paint brush tool, then goto the top left corner and click the little arrow next to the brush. (see image below).

Click the “transparent red spray paint” brush, now because we have added a mask to our layer the brush wont actually be red. Start to brush on the bonnet (make sure your top layer is selected), You will notice the bonnet starts to disapear and the image underneath comes throu.

Carefully go around the bonnet making sure you dont go too far over. Finished.

You can also use this effect on other types of images EXAMPLE.