As indicated during the tabling of Budget 2026 last Friday by prime minister and finance minister Datuk Seri Anwar Ibrahim, the government will, together with national carmakers, offer a matching grant (or geran padanan) of up to RM4,000 to encourage vehicle owners with vehicles aged more than 20 years to voluntarily dispose of their old vehicles and purchase new national vehicles.
Essentially, should either Proton or Perodua offer RM4,000 for an old car in a ‘cash for clunkers’ programme, the Madani administration will match it with a grant of RM4,000, meaning an RM8,000 rebate on the old car, which can be used for the purchase of a new national car.
Should the sum from the carmaker be less, the government will match that amount. The OEMs can offer more, but the government aid maxes out at RM4,000. As reported previously, the only T&C announced is that the car to be disposed must be over 20 years old.
The Malaysian Automotive Association (MAA) has welcomed the move, saying that this represents a progressive step toward improving vehicle safety, promoting environmental sustainability as well as supporting the country’s national car brands.
In a statement, the association said it viewed the move as a strategic step towards developing a comprehensive Vehicle End-of-Life (ELV) policy, which would help systematically remove old and inefficient vehicles from the road, reduce safety risks and lessen environmental impact, and said it is prepared to engage with the government to develop effective mechanisms to achieve these objectives.
Based on its assessment, the uptake for this initiative could represent up to 5% of total industry volume (TIV). A similar voluntary scrapping programme implemented in 2009 involving Proton and Perodua saw about 31,000 vehicles scrapped under a comparable incentive scheme.
To further enhance the impact of the initiative, the MAA has also suggested that the government should consider extending the eligibility to include locally-assembled (CKD) models of other automotive brands. It said that such an extension would broaden participation across the local assembly ecosystem, strengthen investment in Malaysia’s CKD operations and generate greater economic spillover benefits throughout the supply chain.
Separately, the MAA also commended the government’s announcement of excise duty and road tax exemptions for taxi drivers and private car rental operators who purchase Proton and Perodua vehicles, saying that it reflects the government’s continued commitment to supporting the local automotive ecosystem while easing the financial burden on small business operators in the transport and mobility service sectors.
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kesian many malaysians who till today are still proudly driving their old junk BMW E60 or Civic FD.
Why kesian? You gonna top up money for them to buy a new car after the measly grant from gomen and OEM habis?
Unfortunately you are right. One important country’s image is the type of cars on the road after the infrastructure the country have. If most cars on the roads are old cars, it will give the impression to all tourists that the country is very poor and incapable of providing wealth to its people. That is why Dubai is smart. The make all cars tax free and cheap so everyone can buy good cars. With more luxury cars and buildings, more investor flocks in and they start making alot of money today. Have to think far. Sikit sikit tax and AP, how to maju?
20 years ago means the car is from 2005. 2005 Camry, Vios from those days are bulletproof. No touchscreen. All physical buttons. Mechanical Door handles. No gadgets. Metal oilpans. No ADAS. Still have signal stalk. Actual gauge cluster instead of LCD screens. More reliable and easy to maintain that the newest cars.
New cars today all ipad on wheels. No thanks to Tesla which made it a trend.
those classic cars also scrapped kah?
its optional . read.
..It’s great news BUT if one can’t afford to buy a new car, even a used 5 year old car, what are their options?