In a move aimed at encouraging Malaysians to retire old vehicles, Prime Minister Datuk Seri Anwar Ibrahim announced a one-off payment of RM4,000 for owners of cars older than 20 years. The proposal was unveiled during the Belanjawan 2026 budget presentation on 10 October 2025.
According to the Prime Minister, vehicles over two decades old can pose safety risks and may no longer be economical to maintain. To address this, the government plans to collaborate with national car manufacturers, offering matching grants to incentivise owners to dispose of ageing cars and invest in newer models.
This initiative is designed to tackle both road safety concerns and environmental issues, as older cars often emit higher levels of pollution. By providing financial support, the government hopes more Malaysians will upgrade their vehicles to safer, more efficient models.
Eligible recipients will be able to claim the one-off aid, which is part of a broader effort in Belanjawan 2026 to support citizens and stimulate the automotive sector. Officials emphasised that the scheme is targeted specifically at vehicles over 20 years old, ensuring that assistance goes to those most in need.
Experts note that this move may also stimulate domestic car sales, benefiting local manufacturers and related industries. At the same time, it provides a practical incentive for drivers to remove potentially unsafe vehicles from the roads, contributing to overall traffic safety.
The RM4,000 grant complements other measures in Belanjawan 2026 aimed at supporting citizens’ welfare, including financial assistance for retirees, incentives for public servants, and programmes to enhance youth employability.
Authorities encourage eligible car owners to take advantage of this one-off payment and ensure they comply with the application process once guidelines are released. The initiative marks a significant step in modernising Malaysia’s vehicle fleet while protecting both drivers and the environment.