Owners of cars more than two decades old may soon receive financial support to retire their vehicles under a new matching grant programme introduced by the government.
Launched on 28 January, the initiative was first announced under Budget 2026 and is designed to encourage the disposal of vehicles aged over 20 years, particularly those that are no longer roadworthy, rarely used or left abandoned. The programme carries a total allocation of RM10 million and is expected to benefit around 5,000 vehicle owners.
Transport Minister Anthony Loke Siew Fook said the scheme aims to address multiple issues linked to ageing vehicles, including road safety risks, congestion and environmental impact. Older cars often lack modern safety features and, when poorly maintained, can pose hazards to both drivers and other road users.
Under the programme, eligible owners will receive a government grant of RM2,000 when they scrap their old vehicle and replace it with a new locally produced model. For most Proton vehicles, manufacturers will provide an additional RM2,000 in matching incentives, bringing the total benefit to RM4,000.
However, two Proton models — the latest Saga and the e.MAS 5 — are excluded from the matching component and will only qualify for the RM2,000 government grant.
According to Loke, the scheme is not intended for owners whose vehicles still command strong resale value in the used-car market. Instead, it is targeted at vehicles that are no longer economically viable and are often left unused, sometimes parked indefinitely along public roads.
To prevent misuse, vehicles surrendered under the programme must be deregistered through the Road Transport Department’s e-DeREG system and disposed of at licensed Automotive Authorised Treatment Facilities. This ensures the vehicles are permanently removed from circulation and handled in line with environmental standards, reducing the risk of illegal reuse.
Official data shows that as of December 2025, Malaysia had nearly 20 million registered cars. More than four million of them have not held valid road tax for over three years, highlighting the scale of dormant vehicles nationwide.
Details on eligibility criteria and application procedures are expected to be announced in the coming weeks.
