The vest was understood to have been triggered by the car hitting a speed bump in suburban Hallam on Saturday morning, Seven News reported.
Security camera video showed the flash of the explosion rise about the roof and from the driver’s side window. A speed bump wasn't apparent in the video.
The car continued to travel a few hundred meters (yards) before it hit a parked vehicle.
A 43-year-old man was found dead inside his car, police said. Police have not released his name.
Bomb Response Unit members worked to render the explosives in the car safe, police said. They were investigating the circumstances of the man's death but do not consider him a crime victim.
Police did not say where the man was heading. He had visited the home of his ex-partner immediately before his death, Seven reported.
Neighbors said police spent almost 24 hours at the scene, Seven reported.
“I just heard a big, loud bang at 11 a.m. and looked out the window of my house and saw a car had gone through the roundabout and hadn’t braked or anything like that and crashed,” witness Ben Augel told Seven.
Seven described the driver as a former soldier and a father.
A spray painted tribute on a brick wall near the scene of the tragedy said: ”Dad my soldier 4 ever” with a love heart.