Simon Jones, who lives across the road, said he had been "hearing a few bangs".
Mr Jones took an aerial photograph of the fire and said the blaze was "still bad", but "looks contained in the hangar, probably full of expensive cars".
On Facebook, Bicester Town Councillor Sam Holland said: "Very serious fire in northern Bicester.
"Do avoid the area near Bicester Heritage if possible."
People have been advised to avoid the area
BBC reporter Molly Pipe was on the scene and said: "You could smell the smoke from perhaps half a mile away.
"Residents came out to the closed roads nearby to see what was happening.
"One had her jumper pulled up over her nose against the smoke."
