As announced during the tabling of Budget 2026 by prime minister and finance minister Datuk Seri Anwar Ibrahim, the government is set to amend the Consumer Protection Act 1999 to incorporate elements of a lemon law in Malaysia to protect the rights of consumers with regard to automotive purchases.

This follows on a six-month feasibility study carried out last year, which concluded that there was a need to establish a specific legal framework to address issues and limitations related to consumer protection in the automotive industry. Subsequently, the domestic trade and cost of living ministry (KPDN) drafted a cabinet paper earlier this year proposing amendments to the Consumer Protection Act 1999 to include provisions for a lemon law.

While no timeframe for the enactment was indicated, the move was heralded by the Malaysian Automotive Association (MAA). In a statement, the association said it supports and welcomes the government's move to amend the Consumer Protection Act 1999 to include the lemon law provision, which is in line with its earlier recommendation to integrate this element within the existing Act rather than creating a new law.

In order to ensure effective implementation of the lemon law, the association proposed that clear definitions and criteria should be established to identify what constitutes a "lemon" vehicle, including limits on repair attempts and timeframes.

It added that there was also a need for fair and standardised processes be set for assessment, mediation and resolution to avoid ambiguity and misuse of the provision. Additionally, stakeholder engagement and awareness programmes are also needed to educate both consumers and industry players on their rights and obligations under the amended law.

A lemon law is a form of consumer protection, and there have been many calls to implement it here in the past. In essence, it requires cars under warranty that are found to be defective or unsafe to be fully repaired by the manufacturer. In the event the vehicle is deemed to be irreparable after a reasonable number of repair attempts, the buyer can be offered a refund or replacement.

The scope of what is covered by a lemon law vary depending on how it is implemented, but it generally covers defects that can significantly impact the functionality or safety of the car. Countries such as the United States, Australia, Canada, Singapore and the Philippines have already adopted some form of lemon law.

MAA welcomes gov't move to implement lemon law in Malaysia, but says clear definition, criteria is needed - paultan.org