KUALA LUMPUR (Jan 27): The government is now offering a RM2,000 grant to be matched by national automakers to buyers who trade in vehicles over 20 years old.

With an allocation of RM10 million, the programme will assist 5,000 vehicle owners in replacing their old vehicles with new ones from Proton or Perodua, Minister of Transport Anthony Loke Siew Fook said at its launch on Tuesday.

In essence, eligible participants will receive a rebate of up to RM4,000 for the purchase of a new vehicle. The initiative was announced back in Budget 2026.

The initiative is aimed at bolstering road safety by reducing the number of ageing vehicles on the roads. Traded-in vehicles will be disposed of legally via authorised treatment facilities to ensure they are scrapped in a controlled and professional manner, in compliance with environmental standards.

“In addition to benefiting the people, this programme also supports the local automotive industry, increases domestic demand, and stimulates economic activity across the automotive industry value chain,” Loke said in his speech.

He noted that road tax for about one in five registered vehicles in Malaysia has not been renewed for more than three years, suggesting a likelihood of them having been abandoned.

The initiative comes as the government deferred planned revisions of excise tax on locally assembled vehicles by another six months, helping to stave off immediate price increases on completely knocked-down cars.

National carmaker Proton launched its own similar programme in May last year. The programme, which has a lower trade-in vehicle age threshold of 15 years, saw the participation of over 4,000 Proton customers.