A 25 year-old man from the Mansfield area has been arrested on suspicion of a number of motoring offences following an incident near Spilsby on Sunday, May 18.
Police were called to Partney roundabout shortly before 5am on Sunday morning after a Volkswagen Lupo was involved in a collision with a blue Peugeot 406 estate.
A local man and a woman in their 20s, who were the occupants of the Lupo, received medical treatment for minor injuries.
The Peugeot left the scene without stopping and was found on fire a short time later in Skendleby.
A police dog was used to track from the scene and led officers to two men walking along the side of the road.
One of the men, the 25 year-old from Mansfield, was arrested on suspicion of failing to stop after a road accident, driving with a provisional licence, and driving with excess alcohol.
He has been released on police bail until July, to allow enquiries to continue.
Police are appealing for any witnesses, who saw the collision at Partney roundabout, or who saw the vehicle being driven any time prior to the fire at Skendleby.
Anyone with information should contact Lincolnshire Police by dialling 101 and quoting incident number 110 of May 18.
You can report crimes anonymously by contacting Crimestoppers on 0800 555 111.