Detective Senior Constable Stuart Sims, of the Colac police crime investigation unit, said an offender entered a Stewart Street home in south Colac early Sunday morning.

He said that about 3.30am the offender stole a set of keys to a silver Holden Rodeo.

That vehicle was soon after involved in a collision on the Colac-Ballarat Road at a railway crossing.

"The Holden Rodeo suffered extensive damage after colliding with a boom gate and is expected to be an insurance write-off," Detective Senior Constable Sims said.

"There has been a forensics examination of the vehicle conducted by police officers and hopefully we will be able to identify the offender involved."

A dairy farmer came across the accident scene and made a report to police, but at this stage the offender has not been identified.

"We went and saw the owner of the vehicle, who was still very much asleep when we arrived," Detective Senior Constable Sims said.

"He was completely shocked that his ute had been stolen and was far from happy that it had been damaged.

"It was a disappointing end to what had been a great night because he is a Collingwood supporter and they obviously had a great win against West Coast on Saturday night."

The ute is worth about $10,000.

Anyone with information about the offender, who we suspect has a large bump on his forehead, is requested to contact the Coolac police station or Crime Stoppers on 1800 333 000.

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