A RM10 million matching grant initiative was launched today to encourage owners of vehicles older than 20 years to dispose of their old cars. The move aims to improve road safety, reduce motorists’ financial burdens, and phase out unsafe vehicles from Malaysian roads.
Transport Minister Loke Siew Fook said the initiative, announced under Budget 2026, allows eligible vehicle owners to receive up to RM2,000 from Malaysian manufacturers, which will be matched by the government for a total benefit of RM4,000 to purchase new cars.
“The initiative starts immediately at Proton and Perodua showrooms,” Loke said during the launch.
He added that the RM10 million allocation is expected to benefit about 5,000 vehicle owners. Proton and Perodua have been tasked to fully utilise the funds by mid-year, after which the ministry may seek additional allocations from the Finance Ministry.
Loke noted that many Malaysians continue to use vehicles over two decades old not by choice, but due to financial constraints. “Older vehicles are generally less safe, prone to frequent breakdowns, fuel-inefficient, and no longer meet current safety standards,” he said.
The minister explained that the initiative adopts a matching grant approach to ensure shared responsibility among the government, industry, and the public, while optimising the use of public funds.
As of December 31, 2025, Malaysia had 19.69 million registered vehicles, with 4.075 million (about 20.7%) having inactive motor vehicle licences for three years or more. Such vehicles may be considered abandoned and could pose safety hazards, cause environmental pollution, and disrupt local communities if left unmanaged.
To address this, the programme will be supported by the Road Transport Department’s (JPJ) online vehicle deregistration system, e-DeREG, allowing owners to cancel registrations digitally without visiting counters. “This digitalisation makes the process faster, more transparent, safer, and more user-friendly, while reducing bureaucracy and waiting times,” Loke said.
Vehicles replaced under the programme will be disposed of through authorised automotive treatment facilities (AATF) to ensure legal, professional, and environmentally compliant dismantling, and to prevent old vehicles from illegally re-entering the roads.
Move to Replace Ageing Taxis
Loke also announced a separate initiative to replace ageing taxis with new vehicles. Under the scheme, old taxis will be exchanged for new ones through affordable payment arrangements, with the programme expected to launch within the next one to two months.
Data released by the Malaysian Automotive Association (MAA) shows total vehicle sales reached 820,752 units in 2025, a slight 0.5% increase from 816,747 units in 2024.
In October last year, Prime Minister Anwar Ibrahim announced a vehicle scrapping incentive of up to RM4,000 under Budget 2026 to encourage owners of vehicles over 20 years old to replace them with new national cars.
