The Ministry of Transport has rolled out the Matching Grant Programme, aimed at encouraging Malaysians to replace vehicles aged 20 years and above with newer, safer and more energy-efficient cars.

Introduced under Budget 2026, the scheme offers eligible vehicle owners a government matching grant of up to RM2,000 when trading in their old cars. The final incentive depends on the trade-in value offered by participating carmakers, currently Proton and Perodua.



Under the mechanism, the government will match the manufacturer’s over-trade value. For example, a RM2,000 trade-in incentive from Proton will be matched with another RM2,000 from the government, giving buyers up to RM4,000 towards a new car. However, Proton Saga and Proton eMAS 5 qualify for a lower grant of RM1,000. Perodua will announce its model-specific incentives later.

The programme is funded by a RM10 million allocation, expected to benefit around 5,000 vehicle owners.



JPJ data shows Malaysia had 19.69 million registered cars by the end of 2025, with over 4 million vehicles having inactive road tax for three years or more. The initiative aims to reduce road safety risks, as older vehicles often lack modern safety features.

All surrendered vehicles will be disposed of through Authorised Automotive Treatment Facilities (AATF), while deregistration will be handled digitally via JPJ’s e-DeREG system, eliminating the need for counter visits.