The abandoned vehicle was found on a towpath at Stoney Lane, near Netherton, partially in the canal water.
It is thought to have been driven along the tow path destroyed by what looks to be severe fire damage.
Oil from the car has since leaked into the canal water, causing damage to wildlife.
A tweet from Dudley Canal and River Trust said: "Burnt out car driven along the canal in Netherton then set on fire.
"Oil leak onto the canal too.
"So furious about this continual abuse of our inland waterways."
The incident had also been reported to the Canal and Waterways Trust.
The Dudley Canal and River Trust confirmed that the car had been dealt with on January 30.
