The man was highly agitated after being arrested on Sangsters Road in Wodonga on Sunday morning, about 300 hundred metres from the crashed Toyota HiLux.

The vehicle crashed into a tree on the side of a footpath near Felix Grundy Park.

A damaged wheel appeared to have sparked a fire, which melted plastic near the driver's seat.

Witnesses allegedly saw the man leave the vehicle and return multiple times before riding away on a bike.

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Some reported seeing the car driving erratically, at high and low speeds, through parkland before the crash.

The distinctive white vehicle was stolen from a home in Lavington on Saturday night or Sunday morning.

The fire caused minor damage to the car and spread to a small section of grass near House Creek.

The owner, who asked not to be named, said he was feeling "pretty dirty" about the situation.

"I came outside, opened up the door, and what do you know, the car was gone," he said of realising the vehicle was missing.

"It's my pride and joy.

"It's pretty frustrating."

The vehicle, which was stolen near McDonald Road, featured one-of-a-kind artwork which had been airbrushed on by an artist.

"There's not another one like it," the owner said.

"A lot of time and effort went into it."

The man was waiting to see how much damage had been caused to the vehicle.

Detective Senior Constable Tracy Jarrott said police didn't believe the car was deliberately torched by the arrested man, with the fire likely caused by the damaged wheel rim scraping along the concrete footpath.

"A male has been arrested," she said.

"He will be questioned in relation to handling stolen goods and for driving offences.

"Apparently there were a lot of people down at Sumsion Gardens, if anyone else has seen his driving we'd like to get details from them."

The incident occurred about 10.50am.

Firefighter Sean Crosthwaite said the blaze was quickly put out.

"We extinguished the front wheel which was on fire," he said.

"It resulted in a very small grass fire."

The arrested man, who was shirtless when taken into custody, could be heard screaming after being caught by police.

A bike was also recovered nearby.

Anyone with further information can call (02) 6049 2600.