The incident happened on Saturday while the car was traveling through the Daunne area on the East-West Highway.
All five passengers immediately escaped and saved their lives, according to the police. However, their belongings and money were burned in the car.
The cause of the fire is still under investigation.
Police reported that the car caught fire suddenly as it reached Daunne while heading to Kathmandu for a visit to Pashupatinath Temple.