The government has rolled out a new Matching Grant Programme aimed at helping Malaysians replace cars that are more than 20 years old with safer, modern models from Proton or Perodua.

Government to offer RM4,000 incentive

Announced today by Transport Minister Anthony Loke, the initiative was introduced under Budget 2026 and comes with a RM10 million allocation, expected to benefit around 5,000 vehicle owners nationwide.

Anthony Loke announce a new programme that will offer up to RM4,000 incentive when M’sians retire their old car that’s over 2 decades.
Image credits: Malay Mail

Under the programme, eligible applicants will receive a matching grant of up to RM2,000 from the government, which will be matched by participating local car manufacturers. This means buyers can enjoy a bigger overall incentive, helping to lower the cost of purchasing a new vehicle.

Incentive details

  • Most Proton models qualify for a total incentive of up to RM4,000, made up of RM2,000 from the government and RM2,000 from the manufacturer
  • The new Proton Saga and Proton e.MAS 5 are exceptions, with a lower total incentive of RM2,000

According to Loke, the programme serves two key purposes which are:

  • To reduce the number of old and inactive vehicles on the road, helping to ease traffic congestion
  • To improve road safety, as older vehicles often lack modern safety features
Retire your 20-year-old car.
Image credits: Proton

“With vehicle numbers continuing to rise, our challenge is ensuring that whenever new vehicles enter the system, old ones are taken off the road,” he said, noting that Malaysia recorded a record 820,000 new vehicle sales last year.

He added that the initiative is mainly meant to support owners of low-value or long-idle vehicles, rather than cars that still hold strong resale value.

More details to be announced soon

“If some feel their cars are worth more in the second-hand market, that’s fine. Our focus is on helping owners whose vehicles have been sitting unused by the roadside for years,” he explained.

To ensure transparency, vehicles surrendered under the scheme must be deregistered through the Road Transport Department’s (JPJ) online e-DeREG system. The vehicles will then be scrapped at licensed Authorised Automotive Treatment Facilities (AATF), in line with environmental standards, to prevent them from illegally returning to the road.

The need for such a programme is clear. JPJ data shows that as of December 2025, Malaysia had nearly 19.7 million registered cars, with over four million recorded as having inactive road tax for three years or more.

More details on eligibility criteria and application procedures are expected to be announced soon.

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