The Malaysian government is finally moving to help car buyers find recourse for purchasing a lemon.
Buyers of defective cars can finally rejoice, as there might soon be a real solution for those unlucky enough to have been handed one. Such is especially because during his Budget 2026 presentation in Parliament, Prime Minister Datuk Seri Anwar Ibrahim had just announced that the government will be amending the Consumer Protection Act 1999 to (finally) include lemon law provisions.
In essence, this upcoming amendment will give consumers proper legal recourse if the car they purchase turns out to be a dud. Instead of being brushed off by dealers with a “tough luck” response when their supposedly new car spends more time in the workshop than on the road, affected owners will finally have the right to request a refund or replacement.
Now for those who are perhaps unfamiliar with the terminology here, a “lemon car” — as defined in jurisdictions with similar laws — refers to a vehicle that has been sent back to the workshop at least three times for the same issue (whether safety-related or otherwise) and remains unresolved despite repeated repair attempts. Under such laws, the manufacturer (through its dealer) is to be obligated to buy back the defective vehicle, and compensate the buyer for losses (including depreciation, usage, and even legal fees where applicable) to ensure a fair outcome.
And for anyone thinking this isn’t a common issue, there are actually quite a number of lemons that have given Malaysian car owners plenty of headaches. One of the more high-profile cases occurred in 2021, when the Sessions Court awarded the owner of a Volkswagen Polo Sedan RM 90,000 in damages after determining that the vehicle suffered from serious and recurring defects.
More recently too, similar (though less litigious) instances of defective cars from both legacy marques and newer brands have gained traction on social media. Such cases consistently highlight how widespread these issues really are, and why clearer laws are needed to hold automakers and dealers accountable.
At present, the finer details of Malaysia’s upcoming lemon law remain under wraps. One major issue it is expected to tackle however are concerns regarding the difficulty consumers face in obtaining consent letters from financial institutions before filing claims, particularly for vehicles under hire purchase. The proposed amendments should streamline this process and eliminate ownership-related bottlenecks that have long discouraged affected owners from seeking redress.
Incidentally, this consumer protection reform has been a long time coming. Back in March 2024, the government initiated a feasibility study after acknowledging that the existing Consumer Protection Act offered little real protection for car buyers. By May 2025, the Ministry of Domestic Trade and Cost of Living had already tabled a cabinet paper proposing the necessary amendments, supported by a six-month legal review.
Building on that groundwork, the upcoming amendments are set to bring Malaysia’s consumer protection framework closer in line with established practices in the United States, Europe, and Singapore. All of which have long enforced their own lemon laws.
Rather importantly too, the implications of this new legislation are expected to extend beyond just new car buyers. Such is as those who prefer buying used will all but likely be granted protection under this new amendment as well, with dealers and reconditioned importers to have their feet more closely held to the fire when trying to punt off always is allegedly a “clean one lady-owner car”.
In a related announcement meanwhile, the Prime Minister also confirmed that e-Invoicing will be fully implemented in 2026 as part of the government’s broader tax reform initiative. This system will standardise transaction reporting, making it harder for businesses to under-declare values or manipulate records.
For car buyers, this promises greater price transparency and traceable documentation. For businesses, it represents a firm step toward stricter compliance and cleaner, more accountable practices across the board.
