More than half of that cash has been paid out by Scotland’s largest local authority, Glasgow City Council.
Compensation payments to drivers by Glasgow council have totalled £1,821,576 over the period 2007-8 to 2011-12, according to figures obtained by the Conservatives using freedom of information legislation.
Across Scotland, drivers have received £3,558,201 from local councils to compensate for damage caused by potholes over the five years.
The amount is increasing, with £1,232,908 paid out last year, compared with just £342,476 in 2007-8.
The revelation comes after a survey of members of the AA motoring organisation found those in Scotland were most likely to report pothole damage to cars, with 44 per cent saying their vehicles had suffered damage in the past two years.
The Tories are now urging the SNP administration to prioritise work to repair road surfaces.
The Conservatives’ transport spokesman Alex Johnstone said: “Potholes are a real problem across Scotland and you can see this from these figures.
“If the SNP dropped its anti-car agenda and actually tried to improve the roads, it could help save the councils some money in future.”
While Glasgow City Council paid out more than £1.8m over the five years, Orkney Islands Council compensation payments totalled just £244.
But Mr Johnstone said many drivers might have had their cars damaged by potholes and not claimed cash back from the relevant council. He said: “No-one wants to sit down and take action against the council because of damage the roads have done to their car, because it’s a lengthy and complex process.
“But times are tight and a trip to the garage is rarely a cheap one.
“These figures won’t even include the many people who simply can’t face the red tape and pay for the damage themselves.”
Labour transport spokesman Richard Baker said: “There is clearly a huge amount of public money going on settling damage claims because the SNP government has failed in its duty to provide adequate funding to improve Scotland’s road networks.
“SNP ministers are simply passing the buck, as they have substantially cut budgets to councils.”
However, the SNP government defended its investment in transport saying councils were solely responsible for local roads.
A Scottish Government spokeswoman said: “The maintenance of local roads is a matter for local authorities, who received almost £11 billion in Scottish Government funding this year.