The youth was trying to steal a Honda Amaze car in Ragunath Bazar area of the city when people raised an alarm as he tried drive away with the car but was caught by locals last evening, police said.
He was later handed over to police and was formally arrested, they said adding that the car lifter was identified as Afroz Ahmed of Dardokoot village in Kulgam district of south Kashmir.
The police also recovered the car.
The incident happened ahead of Prime Minister Narendra Modi's visit to the Jammu region to inaugurate India's longest road tunnel at Chenani in Udhampur district, where he will also address a public rally on April 2.
"The person is being questioned. However no militant links have been found in this case," State House Officer (SHO) City Police station Sunil Kumar said.
Earlier, three youths from south Kashmir's Shopian district had snatched an AK-47 rifle with 30 rounds on March 25. All the three youth were arrested and rifle recovered by the police.