Malaysia Moves Closer to Lemon Law for Car Buyers
The Malaysian government is finally making concrete steps toward introducing “lemon law” provisions to protect consumers against defective new vehicles. The Domestic Trade and Cost of Living Ministry has prepared a cabinet paper proposing amendments to the Consumer Protection Act 1999. These amendments aim to formally incorporate lemon law mechanisms, addressing long-standing gaps in automotive consumer rights.
Deputy Minister Fuziah Salleh confirmed to the New Straits Times that the ministry has completed a six-month legal study evaluating the feasibility and implementation strategy for lemon law. The study, which ran from June to November 2024, concluded that a dedicated legal framework is necessary to handle issues related to faulty new vehicles more effectively.
Currently, the Consumer Protection Act, Contract Act 1950, Sale of Goods Act 1950, and the Hire-Purchase Act 1967 offer fragmented protection. The proposed amendments aim to streamline these provisions and provide clearer processes for dispute resolution, particularly regarding compensation claims involving cars and motorcycles still under warranty.
This development follows a similar announcement in June 2024 by then-Minister Datuk Armizan Mohd Ali, who had appointed legal experts to review international best practices and recommend improvements. At that time, the government had also introduced interim measures, including a special negotiation task force for motor vehicle complaints and a collaboration with Bank Negara Malaysia to ease access to consumer tribunals.
One key issue the proposed lemon law seeks to address is the difficulty consumers face in obtaining consent letters from financial institutions to initiate claims, especially for vehicles under hire purchase agreements. The upcoming changes are expected to resolve such ownership-related bottlenecks.
With feedback currently being collected from key stakeholders—including the Finance Ministry, Transport Ministry, and the Attorney-General’s Chambers—the cabinet will next consider the proposal for policy approval. If passed, the amendments would mark a significant leap forward for consumer protection in Malaysia’s automotive sector.
Industry observers note that Malaysia’s progress on lemon law is long overdue, especially as car prices rise and vehicle ownership becomes more financially burdensome. The new legal framework could finally level the playing field for buyers facing persistent vehicle defects.
