The Ministry of Transport (MOT) has launched a matching grant programme aimed at encouraging vehicle owners to replace cars aged 20 years or older with newer, safer, and more energy-efficient models from Malaysia’s national carmakers. Funded through an allocation of RM10 million under Budget 2026, the programme is positioned as a road safety intervention while also supporting the local automotive industry.
Under the scheme, each eligible recipient will receive a government grant of up to RM2,000, which will then be matched by participating local vehicle manufacturers. This brings the total incentive to as much as RM4,000 for qualifying models, depending on the carmaker and vehicle selected.
In its statement, MOT said older vehicles are generally more prone to mechanical failures, lack modern safety features, and no longer meet current safety standards. As such, replacing ageing vehicles through this programme is viewed as a high-impact measure to reduce road safety risks.
The ministry added that road safety is a matter of life and death, stressing that every old vehicle removed from the road under the programme represents one less safety risk. It said the initiative contributes directly to the well-being of the rakyat by addressing preventable hazards associated with outdated vehicles.
Proton Models And Grant Amounts
Transport minister Anthony Loke said all Proton models will be eligible for a total grant of up to RM4,000, made up of RM2,000 from the government and an equivalent amount matched by the carmaker. However, the latest Proton Saga and the eMAS 5 are excluded from this higher tier and instead qualify for RM1,000 from the government, matched by Proton for a total of RM2,000.
Loke added that details for Perodua models will be announced by the carmaker at a later date. This suggests that the scope and incentives for Perodua vehicles are still being finalised.
Not For Every Used Car Owner
Loke also clarified that the programme primarily targets owners of idle or low-value vehicles, while the allocated budget is estimated to cover approximately 5,000 vehicles. He noted that owners who believe their cars have higher value on the used market are free to sell them through conventional channels instead, as participation in the scheme is voluntary.
Scrapping Process And East Malaysia Inclusion
Vehicles surrendered under the programme must be deregistered via the Road Transport Department’s Online Vehicle Deregistration System, or e-Dereg. MOT said these vehicles will then be disposed of legally through authorised automotive treatment facilities, which are licensed disposal centres that ensure scrapping is carried out in a controlled and environmentally compliant manner.
Although Sabah and Sarawak currently do not have authorised automotive treatment facilities, Loke said the matching grant programme will still apply to East Malaysia on inclusivity grounds. He added that the programme will commence this month once Budget 2026 receives approval.
