Police has arrested the mental patient who skipped arrest last Friday over a crime report that arrived an hour late.

Convicted criminal Trent Jennings, 26, who has been held in a psychiatric facility since 2005 after he stabbed a man to death while on drugs, tied up a man and stole his car late last week.

Jennings was pulled over by police on Friday over a traffic violation, but he was let go after he was issued with infringement slips. An hour later, the man he met for casual sex on Thursday went to the police to report his stolen car.

Jennings was granted the day release privilege by a mental health review tribunal in November last year. When he was on day release last Thursday, he allegedly went to the Zetland home of a 50-year-old man he met online.

Police released the information to the public on Tuesday, saying Jennings could be driving the stolen black 2008-model Mercedes B200t with NSW registration ALM 82B.

NSW Police said they arrested Jennings about 6:45am Wednesday after they received reports about a black Mercedes Benz seen in Bayshore Drive, Byron Bay.

He was found sleeping in the car, the Sydney Morning Herald reported.

"He was arrested without incident and taken to Byron Bay Police Station," police said in a statement.

Jennings was found not guilty of murder on the grounds of mental illness in 2005, but he was ordered to go through psychiatric therapy.