Officers first spotted the allegedly stolen Toyota Corolla driving erratically on Wood St in Preston about 4.15am.
The vehicle travelled to Broadmeadows, where it was involved in a minor collision with an unmarked police car near Widford Street, before taking off.
A short time later it was involved in another collision with a second car at the intersection of Widford Street and Camp Road.
Images from the scene show the car flipped on its side.
Police said a man aged in his 50s was arrested and is currently being interviewed.
No one was injured during the incident.
