KUALA LUMPUR – The government has unveiled a new matching grant programme designed to encourage the replacement of vehicles older than 20 years with safer, more modern alternatives.
The initiative, announced as part of Budget 2026 with a RM10 million allocation, aims to support vehicle owners by providing incentives of up to RM4,000 for upgrading their vehicles, local media reported.
Transport Minister Anthony Loke explained that the programme seeks to address the safety risks posed by aging vehicles and alleviate the financial strain on their owners.
Under the scheme, eligible buyers will receive a government grant of up to RM2,000, which will be matched by participating local car manufacturers, bringing the total incentive to as much as RM4,000.
“This is a practical, targeted and high-impact programme that gives direct benefits to the people, especially owners of old vehicles who face high maintenance costs and safety risks,” Loke said during the programme’s launch.
Many Malaysians continue to use vehicles over two decades old due to financial constraints and the necessity of daily transportation. However, these vehicles are often prone to frequent breakdowns, fuel inefficiency, and lack of compliance with modern safety standards.
The programme is expected to benefit at least 5,000 vehicle owners nationwide. To qualify, vehicles must be disposed of through an Authorised Automotive Treatment Facility (AATF) and deregistered via the Road Transport Department’s Online Vehicle Deregistration System (e-DeREG).
“This is not just an administrative exercise. Removing old vehicles from the road is a safety intervention that can prevent accidents, reduce injuries, and save lives,” Loke said.
Data from the Road Transport Department (JPJ) shows that as of last year, Malaysia had 19.69 million registered vehicles, with 4.07 million – or roughly 20.7% – having inactive road tax for three years or more, putting them at risk of being classified as abandoned.
Loke also highlighted that the use of the e-DeREG system would streamline the deregistration process, making it faster, more transparent, and user-friendly while ensuring that old vehicles are disposed of legally.
The programme is being implemented in collaboration with national carmakers Proton and Perodua. Vehicles of any brand are eligible to be scrapped under the programme, but the matching grant applies only to purchases of new and selected Proton and Perodua models. – January 27, 2026