The non-equilibrium dynamics of matter excited by light may produce electronic phases that do not exist in equilibrium, such as laser-induced high-$T_c$ superconductivity. Here we simulate the dynamics of a metal driven at $t=0$ by a pump that excites dipole-active vibrational modes that couple quadratically to electrons, and study the evolution of its electronic and vibrational observables. We provide evidence for enhancement of local electronic correlations, including double occupancy, accompanied by rapid loss of long-range spatial phase coherence. Concurrently, the onsite vibrational reduced density matrix evolves from its initial coherent state to one with a predominantly diagonal structure whose distribution qualitatively resembles the coherent state Poisson character. This rapid loss of coherence controls the electronic dynamics as the system evolves towards a correlated electron-phonon long-time state. We show that a simple model based on an effective disorder potential generated by the oscillator dephasing dynamics for the electrons provides an explanation for the flattening in momentum of electronic correlations. Our results provide a basis within which to understand correlation dynamics of vibrationally coupled electrons in pump-probe experiments.