We know that potential energy is given by:
Assuming we are measuring it from ground level and that the water is at this level, then the maximum potential energy of the car is at the top od the cliff.
Now, as the car is falling, it is loosing potential energy but we know that energy is conserved and then it is changing to another type of energy; for the sake of the problem let's assume all potential energy is transforming to kinetic energy then at the water the kinetic energy is equal to the original potential energy and that's the maximum energy it will have.
Therefore, the levels of energy reach as the car hits the water are:
Maximum kinetic energy and no gravitational potential energy.
Hence, the answer is option c.