The number of malicious car fires dramatically increased 17% last year and experts fear the problem is set to escalate following the scrapping of leaded fuel last January.

Loss adjusters Carmichael & Co said the worsening figures are not just the work of joyriders.

A growing factor is that owners of some older cars face the cost of converting their engines to run on unleaded petrol if they are unsuited to lead replacement fuel. Car scrap values are also falling, so owners are setting fire to their own cars.

Figures from the adjuster for 1999 show that 50,000 vehicles suffered arson at a cost to insurers of £77m. In 1986, there were only 11,000 arson attacks on cars.

Moreover, the ABI estimates that one in 12 cars are set alight by thieves for kicks.

In one serious incident dealt with by Carmichael & Co, in Margate, Kent, thieves set fire to a stolen Ford Sierra and allowed it to roll down a hill where it collided with a house.

Carmichael & Co adjuster Lloyd Green said the woman occupant was lucky to escape injury but suffered considerable shock. “The front door and adjoining window were almost completely melted so temporary protection was put in place immediately.”

Graham Eades, senior adjuster at Carmichael & Co, believes that while very few car fire claims are fraudulent, one-in-five is blighted by exaggeration.

He said: “Very often the policyholder thinks it's fair to add items since insurers, surely will only take something off the settlement anyway.”

Eades added: “It needs an experienced loss adjuster, with a keenly developed second sense, to sift the wheat from the chaff.”

A spokesman for the ABI agreed that the phasing out of leaded petrol could be a factor in the rising number of car fires. But he added that more research was needed into the question to update a report by the Arson Prevention Bureau two years ago.

The AA however, thought it unlikely that lead replacement fuel was a factor since most older cars can run on the alternative without conversion.