Greater Manchester Police said they had located the vehicle after tracking bomber Salman Abedi's movements in the days leading up to the May 22 attack on a concert by US singer Ariana Grande.
"This is a potentially significant development in the investigation", said the GM0P's Russ Jackson.
Officers sealed off a 100 metre cordon around the Nissan Micra vehicle, around 2 miles (3 kilometres) south of the city centre.
Police earlier released new CCTV footage of Abedi dragging around a blue suitcase, which is yet to be accounted for.
Prince William on Friday visited the city, where he met some of the first officers on the scene.
A total of ten men remain in custody following the bombing.
Abedi's father and brother are also in detention in Libya, where authorities say the two brothers were both part of the Islamic State group which claimed responsibility for the deadly attack.