Ruairi Canning – once shot by dissident republican paramilitaries – flagged down the Citroen Picasso for a £4 lift home and was never behind the wheel, his lawyers argued.
The Belfast Telegraph reports that the 28-year-old also denies allegations of repeatedly spitting on a police officer, offering an alternative explanation that he had been suffering from a nose bleed.
Canning, of Glenabbey Street in the city, faces charges of aggravated vehicle taking causing damage, driving while unfit and disqualified, dangerous driving, assault on police and failing to provide a specimen.
The defendant was refused bail due to the risk of re-offending, a judge ruled
Prosecutors said the car stolen from a taxi firm had crashed into a roundabout on the Buncrana Road in the early hours of November 30.
Canning was standing beside the vehicle in an intoxicated state, the court heard.
It was claimed that en route to custody he spat on the officer a number of times.
During interviews he said that he had not driven in more than a year.
Opposing bail, a Crown lawyer argued that he could abscond to the Republic of Ireland.
She added that the vehicle was seen heading towards the border when it crashed.
Conor O’Kane, defending, stressed his client denied driving the car at any stage.
“He gave an explanation that it was a cold November night, he flagged down what he thought was a taxi and the driver agreed to take him home for £4,” counsel said.
“That was accepted, and then the driver crashed the vehicle and ran off.”
Mr O’Kane also told the court Canning has suffered from depression and was shot in the leg by dissident republicans eight years ago.
Denying bail, however, His Honour Judge McFarland said: “I do not believe this court could put in place conditions that would reduce the risk of committing offences.”
Canning was remanded back into custody.