Damage caused to vehicles by poorly maintained roads is estimated to have cost councils £15m in compensation payouts to drivers this year.
Freedom of Information requests by Britannia Rescue revealed that 143 local authorities have between them paid out £4.8m in compensation claims this year.
If all the 442 councils quizzed had responded the total bill is estimated to be around £15m.
Britannia Rescue said 54,436 claims have been made against councils over the last two years for damage to vehicles including ruined wheel rims, damaged suspension and punctured tyres.
The firm calculated that only £17 per driver is spent on maintaining road surfaces and fixing pot holes.
This is despite the DVLA road tax amounting to an annual £5.7 bn. Of this only 11% is invested in road maintenance and fixing pot holes.
Howard Robinson, Chief Executive of the Road Surface Treatments Association, said: “The high level of compensation claims underlines the futility of under-investment in road maintenance.
“Local authority budgets are already hard pressed with year-on-year funding cutbacks. It is a Catch 22 situation for them as they cannot afford compensation claims nor do they have adequate budgets for a correct level of maintenance.
“Motorists are taxed billions of pounds yet only a small fraction of this is spent on road maintenance.
“The high level of compensation claims resulting from deteriorating roads demonstrates the need for greater investment in the provision of a well-maintained road network”.