Option A is the answer
Ignore the red cars. We will concentrate on the yellow and the blue car.
There are 5 possible positions for the yellow car. For each such position of the yellow car, there are 4 possible positions for the blue car. Therefore the answer is 5*4 =20.
Can you pls. explain why you ignore the number of red cars?
They say that the cars are identical in every way except for the colour.
Therefore, once you have decided on the positions of the yellow and the blue car, the 3 red cars can be arranged in any manner among themselves to give the same display arrangement.
Here's an example. For the sake of understanding, assume that the 3 red cars are r1,r2 and r3.
here's a possible display arrangement
Y B r1 r2 r3
now note that the above display arrangement will look exactly the same as
Y B r2 r3 r1
My understanding of the question tells me that the exact position of a particular car is not important but the display arrangement is.
Therefore, as we seek to find the number of different
display arrangements, we can ignore the similar red cars.
Also, refer to GMAT TIGER's post for a more conceptual approach.