SHAH ALAM, Jan 31 — The RM2,000 cash incentive to encourage owners to replace their old vehicles with newer models is considered too low to effectively motivate most consumers, according to an automotive expert.
Universiti Kebangsaan Malaysia (UKM) Automotive Research Centre lecturer Mohd Radzi Abu Mansor said the amount is far too little compared to the expenses of owning a new vehicle, which could reach tens of thousands of ringgit.
"RM2,000 is only enough to cover a small portion of vehicle ownership costs, like monthly payments, insurance, road tax, and maintenance," he told Media Selangor.
He said any decision to replace an old vehicle is not easy, as it involves a long-term financial commitment, particularly for those facing financial constraints and existing debts.
"In such situations, the RM2,000 only serves more as an initial encouragement or policy signal, rather than a key factor that truly influences consumers’ decisions."
On road safety, Radzi acknowledged that newer vehicles offer better protection through safety features like anti-lock braking system (ABS), electronic stability control (ESC), airbags, and a more solid structure.
However, replacement of all old vehicles could not be done in a short period of time, as the costs are high and a transition period is needed.
"As such, a more realistic measure is a phased replacement, while ensuring that existing vehicles on the road are properly maintained."
He stressed that regular checks on brakes, tires, and maintenance remain crucial to reduce the risk of accidents while waiting to afford a new vehicle.
Without additional support such as a more reasonable trade-in value, low interest rates, or targeted financing assistance, he said the RM2,000 incentive may only benefit those who were already planning to buy a new car.
“In this situation, the policy does not comprehensively address road safety issues,” he said.
In this regard, Radzi believes that the old vehicle disposal policy should be implemented gradually, based on data, and take into account the public’s financial capacity so that road safety can be improved without overburdening users.
Previously, on January 27, Transport Minister Anthony Loke said owners of vehicles aged 20 years or more now have the opportunity to replace their old vehicles under the Matching Grant Program, which targets 5,000 owners.
Under the initiative, each eligible recipient will receive a matching grant of up to RM2,000, which will be matched by participating local vehicle manufacturers.
