The driver, a 43-year-old man from Delacombe, received a cut to the head. His passenger, a 56-year-old man, suffered a broken ankle.

The driver lost control of the Mitsubishi Magna station wagon as he drove down Kennedy's Rd towards a sharp corner leading into Wongerer Lane.

Haddon resident Dorisse Auer said she heard the impact of the crash and made the emergency call for help.

She said there had been a few accidents on that road, which does not have a signed speed limit.

"(But) I've been here five years and I've never seen anything as serious as this," she said.

Dave Blower was driving nearby when he spotted the car surrounded by tree branches.

Mr Blower said he immediately took a chainsaw out of his car to cut away branches so ambulance members could get to the driver's side.

Smythesdale police Senior Constable Craig Grenfell said the men were lucky not to be killed in the crash.

He said police were investigating whether alcohol or speed were factors in the accident.

Yesterday, both men were in a stable condition in Ballarat Base Hospital.

Also near Haddon, a motorcyclist was taken to hospital after crashing into a tree at Bunkers Hill about 11pm on Saturday. The 41-year-old suffered a fractured leg.