During Budget 2026, Prime Minister Datuk Seri Anwar Ibrahim announced that the government would amend the Consumer Protection Act 1999 to include lemon law provisions. Once enacted, Malaysian car buyers will finally have clear legal recourse when they end up with defective vehicles that dealers or manufacturers refuse to fix.

The announcement follows years of complaints and a feasibility study that began in March 2024, after theMinistry of Domestic Trade and Cost of Living (KPDN) acknowledged gaps in existing consumer protection laws.

What Is A Lemon Law And What Counts As A “Lemon”?

A “lemon” is a product (typically a car) with serious defects that cannot be fixed despite multiple repair attempts. The term originated in the United States, where it described products so disappointing that they left buyers with a sour expression.

Lemon laws protect consumers by requiring manufacturers to repair, replace, or refund vehicles that repeatedly fail to meet quality and performance standards. Countries like the US, Singapore, Australia, and the Philippines already have similar protections.

A vehicle typically qualifies as a “lemon” when the defect is covered under warranty and significantly impairs the vehicle’s use, value, or safety. This includes issues like intermittent engine failure, persistent electrical problems, or recurring transmission defects. The manufacturer must be given a reasonable number of attempts to repair the problem, and if it remains unresolved, the buyer may be entitled to a replacement or refund.

What Might Be Covered Under The Lemon Law?

The exact criteria for Malaysia’s lemon law are still being finalised. Based on how lemon laws work in other countries and reporting so far, here are some things that may be included:

• Most lemon laws internationally require manufacturers to have three to four chances to fix the same defect before consumers can demand a replacement or refund
• Some lemon laws also consider the total time out of service during the warranty period
• EVs should be covered, though battery warranties may be treated separately from the main vehicle warranty
• Whether used and reconditioned cars will be covered hasn’t been officially confirmed
• The Tribunal for Consumer Claims (TTPM) is expected to be the primary avenue for claims, with filing fees of RM5. 

What Can You Do Right Now?

While we wait for the lemon law amendments to be finalised, you can take steps if you’re dealing with a problematic vehicle. Start documenting everything now. The more evidence you have of persistent defects and repair attempts, the stronger your eventual claim.

You can also file a complaint with KPDN through TTPM, which has a special negotiation task force for motor vehicle complaints involving tripartite negotiations between the ministry, buyers, and dealers. If your vehicle is under hire purchase, request a consent letter from your bank so you can proceed with claims without ownership complications.

The introduction of lemon law protections is long overdue. For too long, consumers had to navigate a patchwork of laws that often left them without meaningful recourse. This legislation puts Malaysia in line with countries like Singapore, the US, and Australia that already protect their citizens from defective vehicles.

We’ll be updating this article as soon as the government gazettes the lemon law and we have more details on how it will work in practice. 

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