This house is a gem. The Albayzin neighborhood is like a wonderful dream, and this house lets you enjoy it fully. The terraces are comfortable and let you feel like you're soaking in Granada even when enjoying quiet time at home. The views are great - from the upper terrace especially, absolutely stunning (the picture does not do it justice). The furnishings are very comfortable. There is actually a whole extra bedroom (a fourth) in the cave. We weren't there in the heat of summer but I imagine the cave would be very welcome then, and probably cools the whole house. The whole house is a distinctive, delightful place to stay, and feels like the kind of place you could only have in Granada.
Access with a car is possible, but it is as Sarah says - tricky. The streets of the Albayzin are not for the faint of heart (or large vehicles at all), and the barriers mean you can't get in at all at certain times, so you have to keep that in mind. That said, you can drive and park much more easily in the neighborhood at the top of the street, and your car will only be a 5-10 minute walk away. On the whole, I would think carefully about whether you want a car at all in Granada - the entire city is walkable in 45 minutes from this house, there are frequent buses nearby, cabs are not expensive for getting in and out with luggage, and you can rent a car for a day trip or two if you want to (I recommend a trip to the Alpujarah).