KUALA LUMPUR: The government has unveiled a new matching grant programme to encourage owners of vehicles more than 20 years old to retire them in favour of newer, safer and more environmentally friendly models.
The initiative, introduced by the Transport Ministry, was launched yesterday by its minister, Anthony Loke, signalling a stronger policy shift towards road safety, emissions reduction and long-term transport sustainability.
Loke said the programme was practical, targeted and high-impact, providing direct benefits to owners of ageing vehicles who face high maintenance costs and safety risks.
He said many Malaysians continued using vehicles more than 20 years old due to financial constraints, rather than unwillingness to upgrade.
“Old vehicles are usually less safe, fuel inefficient, break down more often and no longer meet current safety standards,” he said in his keynote address.
Under the 2026 Budget, RM10 million has been set aside to benefit about 5,000 vehicle owners nationwide.
Each eligible recipient will receive a matching grant of up to RM2,000, which will be matched by participating domestic vehicle manufacturers, further reducing the cost of purchasing a new vehicle.
Loke said the programme involved national car manufacturers Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd.
The scheme is managed through participating showrooms and vehicle owners may apply immediately.
“This matching approach ensures the government, industry and rakyat share responsibility, while public funds are used efficiently,” he added.
One of the objectives of the programme is to reduce the number of non-roadworthy vehicles on the roads, lowering accident risks and protecting lives.
Road Transport Department (RTD) statistics show that 19.69 million cars were registered in Malaysia up to Dec 31, 2025.
Of this total, 4.07 million, or about 20.7 per cent, had inactive road tax for three years or more.
Loke said these vehicles risked becoming abandoned, creating safety, environmental and community problems.
The programme is also supported by the RTD’s online Vehicle Deregistration System, which allows owners to cancel registration digitally.
He said the digital process made deregistration faster, more transparent and more user-friendly.
Meanwhile, old vehicles under the programme will be disposed of through Authorised Automotive Treatment Facilities.
Beyond direct public benefits, the programme is expected to support the local automotive industry, boost domestic demand and stimulate economic activity.
It is also expected to create jobs, encourage investment and contribute to sustainable economic growth.
Loke said the programme reflected the Madani government’s focus on delivering real outcomes rather than rhetoric.
He urged eligible Malaysians to seize the opportunity to save costs and enhance their safety.
“Let us work together to make Malaysia’s roads safer, cleaner and more people-friendly,” he said.
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