The 20-year-old actress was with two other people in the vehicle when her 2005 Mercedes SL-65 convertible struck a curb and shrub on Sunset Boulevard in California.
Lohan was slightly injured.
The car suffered "major damage," according to police.
The star was hospitalized for minor upper chest injuries. The passengers were not hurt.
Lieutenant Mitch McCann, media relations officer for the Beverly Hills police department said: "A usable amount of an illegal narcotic tentatively identified as cocaine was recovered and booked."
Lindsay, who spent time in rehab to battle alcoholism earlier this year, was shown on a video two weeks ago allegedly taking drugs in a nightclub.
The actress was seen dancing and smoking at Hollywood hotspot Les Deux before the crash. She arrived with a group of pals around 11.15pm.
Last night Fox News correspondent Laura Ingle said there was a very real possibility that Lindsay could serve time alongside Paris, who is due to begin her sentence on June 5.
She said: “She could face a serious jail term and could well end up in the same facility as Paris.�
Saturday’s crash was the actress’s third in two years. In October she received minor injuries when her convertible hit a van. Officials blamed the van driver. Months earlier, she collided with a minivan.
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