Transport strategist Wan Agyl Wan Hassan described the scheme as “modest”.
“With RM10 million allocated to cover about 5,000 vehicles, the scheme would only affect a small portion of Malaysia’s ageing vehicle fleet and would not materially change fleet composition nationwide.
“The RM4,000 is helpful but not transformative, especially for households keeping older vehicles due to affordability issues,” he told FMT.
Wan Agyl said the programme was a “reasonable starting point”, signalling government concern over environmental and safety risks posed by ageing cars.
However, he said, its long-term value would depend on whether it develops into a comprehensive vehicle lifecycle policy.
Wan Agyl cautioned that any move toward stricter vehicle age-based regulation must be paired with better public transport and affordable mobility alternatives, to avoid disproportionately affecting lower-income households who rely on older cars out of necessity.
As of Dec 31, there were 19.69 million registered vehicles in Malaysia, with 4.075 million (20.7%) having been inactive for three years or more, based on the expiry of the road tax.
The matching grant programme, launched by the transport ministry, seeks to incentivise owners of vehicles that are 20 years or older to replace them with selected new models from Proton or Perodua.
Under the scheme, the two manufacturers have agreed to provide a RM2,000 discount per eligible recipient, with the sum being matched by the government. Backed by a RM10 million budget allocation for 2026, it is expected to benefit around 5,000 owners.
However, with new entry-level cars typically costing between RM80,000 and RM100,000, excluding insurance and road tax, motoring expert Yamin Vong fears the take-up rate will be small.
Yamin believes public uptake would be higher if owners of ageing and abandoned vehicles could participate without buying new cars.
He also said the scheme’s long-term value depends on whether it grows into a full lifecycle policy rather than remain a one-off incentive.
Transport consultant Rosli Khan said the government’s transport policies appear inconsistent and at odds with each other.
He said existing policies, such as subsidised RON95 fuel, low road tax, festive toll exemptions, and discounts on traffic summons, have lowered the cost of driving.
“Our government seems to encourage car ownership and use on a wide scale. Now the car-replacement grant is to move old cars off the road and replace them with new ones,” he said.
“There’s a tension between policies that lower the cost of owning and using cars and the larger goal of reducing traffic congestion, pollution, and reliance on private vehicles instead of public transport.”