SHAH ALAM - Thinking of letting go of your rusty, old car? The government has just made it easier for Malaysians to replace vehicles that are over 20 years old with newer, safer models and you could get up to RM4,000 in incentives.
Transport Minister Anthony Loke unveiled the initiative on Jan 27, aimed at removing ageing vehicles from Malaysian roads.
Here's what you need to know about the New Vehicle Replacement Matching Grant Programme announced under Budget 2026:
1. You could get up to RM4,000 to replace your old car
Under the programme, eligible Malaysians will receive a RM2,000 grant from the government, which will be matched by Proton or Perodua, bringing the total incentive to RM4,000 when purchasing most new models from these manufacturers.
2. Only Proton and Perodua models are included (for now)
The scheme applies exclusively to local brands - Proton and Perodua - and aims to make safer, modern vehicles more accessible to the public.
All Proton models except two (see next point) are included.
3. Some Proton models will only get RM2,000
Two models, the Proton Saga and the new Proton e.MAS 5 will not receive the matched RM2,000 from the manufacturer. For these, the total incentive is RM2,000 from the government only.
4. Expected to benefit about 5,000 vehicle owners.
The government has allocated RM10 million for this pilot programme, which is expected to assist about 5,000 eligible vehicle owners.
5. Your old car must be at least 20 years old and deregistered
To qualify, your vehicle must be 20 years or older. It must be deregistered via JPJ’s e-DeREG online system
It will then be scrapped at a licensed Authorised Automotive Treatment Facility (AATF). This ensures the car is properly disposed of and doesn’t illegally return to the road.
6. The goal: Fewer old cars, safer roads
The initiative targets inactive or low-value vehicles, especially those abandoned or left idle for years. As of December 2025, over four million registered cars in Malaysia had not paid road tax for more than three years.
The programme aims to reduce road congestion. It also improves safety standards, as many older vehicles lack airbags, ABS and other safety features.
7. More details are coming soon
While the broad framework has been announced, further info including application procedures and eligibility criteria, will be revealed by the Ministry of Transport in the coming weeks.
Bottom line, if you're holding on to a 20-year-old clunker with no resale value, this may be your chance to upgrade and get paid to do it.