PUTRAJAYA, Jan 27 — The government has launched a new Matching Grant Programme to help Malaysians replace vehicles over 20 years old with safer, modern models from Proton or Perodua, Transport Minister Anthony Loke announced today.

The initiative, introduced under Budget 2026 with a RM10 million allocation, is expected to benefit about 5,000 vehicle owners.

“Under the programme, each eligible recipient will receive a matching grant of up to RM2,000, which will be matched by participating local vehicle manufacturers. 

“This will increase the total incentive received by the public and reduce the overall cost of purchasing a new vehicle,” he said in his speech at the launch event here.

All Proton models (except the new Proton Saga and Proton e.MAS 5) will consequently be eligible for a total grant of up to RM4,000 (RM2,000 from the government, RM2,000 from the manufacturer). The two exempted models will receive a lower total incentive of RM2,000.

Loke said the scheme has two main objectives: to reduce the number of old and inactive vehicles on the road to ease congestion, and to improve road safety, as older cars often lack modern safety features.

“As the number of vehicles continues to grow, our challenge is to ensure that whenever new vehicles enter the system, old vehicles are taken off the road,” he said, noting that a record 820,000 new vehicles were sold last year.

He clarified that the initiative is primarily aimed at helping owners of long-idle or low-value cars.

“If some feel that their cars have more value in the second-hand market, that's fine, but we are aiming to help owners with cars that are long at the roadside,” he said.

To ensure transparency, surrendered vehicles 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 accordance with environmental standards, preventing them from illegally returning to the road.

The need for such a program is underscored by JPJ data, which 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.

Further details on eligibility and application procedures will be announced soon.