Senior Constable Perry Borg, of Corowa police, said a resident reported the car, which had been left on a reserve between Macgill Court and Tower Street, on Sunday.

Inquiries revealed the vehicle had been stolen from Shepparton on July 13.

"I believe the offender is known to the victim in this matter," Senior Constable Borg said.

"The owner was contacted to collect the vehicle; in the meantime the car's been set alight."

Firefighters attended the blaze, which broke out about 10.46pm Tuesday.

IN OTHER NEWS:

Police are still investigating whether the fire is linked to the theft.

Nearby resident Colin Thurston said he heard a noise and looked outside.

"It just kept going off - bang, bang, bang, bang - pieces were flying everywhere," he said.

"I asked all the neighbours and no one saw anyone."

Mr Thurston had noticed the car at the reserve on Sunday morning.

"I thought, 'why would you park over there?'," he said.

Police searched the vehicle the next day.

Mr Thurston was surprised by the whole incident.

"This is a very quiet area here, we've had no problems at all," he said.

EARLIER: Police are investigating a fire that gutted a car in Corowa on Tuesday night.

A Fire and Rescue NSW spokesman said the Corowa crew received the call-out to Macgill Court about 10.46pm and found the vehicle well alight.

"Police were in attendance," he said.

"Unfortunately the car was destroyed, but no other damage or people injured."

Firefighters left the scene at 11.37pm.

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