The driver and a passenger, however, escaped unhurt, police said.
The incident took place at about 3:15 PM and brought the traffic on one side of the street to a grinding halt for a while.
"A red-colour Skoda Fabia was engulfed in flames moments after the driver (also its owner) and his fellow passenger had exited the car," a Delhi Traffic Police official said.
The owner, a resident of Vivek Vihar area in east Delhi said, "I feel lucky that the two of us escaped just in time."
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"I then fetched some water in bottles and tried spraying that on the bonnet but by that time it went up in flames. I then immediately called the fire service," the owner said.
Delhi Fire Service personnel which arrived at the place around 3:30 PM and doused the flames, even as a huge crowd gathered around the accident site, obstructing traffic flow.
"The front of the car seems to be charred. The cause of the fire will become clear later. Right now, we can't say anything with certainty as to what led to the fire," a senior Delhi Fire Service official said.