It has been revealed that those taking part in the Government’s ‘cash for bangers’ car-scrappage scheme are likely to pay a total of nearly £6million in car insurance administration fees by the time the programme ends.

A comparison website said that car insurers are: “stealthily cashing in by penalising motorists with disproportionate mid-term adjustment fees” for changes to a policy following a vehicle swap.

The financial firm also displayed that some insurance firms have changed their mid-term adjustments fees by 43% in the last year.

It stated that those participating in the initiative have so far been charged around £679,000 in fees for making car insurance policy changes, with the total charge likely to be around £5.82 million.

Ashton Berkhauer, from the website said: “Consumers opting for the car-scrappage scheme may soon find the shine taken off their new vehicle when they find themselves hit with disproportionate "admin" fees when updating their existing car insurance policy for the new vehicle.

“Even those motorists who find the cover for their new vehicle to be cheaper than the amount they paid to insure their older vehicle will still be subject to a policy adjustment fee, which certainly diminishes any money saved on their premium.

“Motorists must do their research when it comes to charges ‘hidden’ away in the terms and conditions of car insurance policies.”