Category: Automotive

Status as of October 19, 2025 (MYT): The government has announced that Malaysia will introduce lemon-law style protections (via amendments to the Consumer Protection Act 1999), but the bill has not yet been passed into law. The announcement was made in conjunction with Budget 2026; industry groups have welcomed it and asked for clear definitions.

Below is an extensive, practical guide for MalaysianLaw.my readers that (1) explains what “lemon law” typically covers, (2) summarises what the Malaysian rollout is expected to look like, (3) shows exactly what you can do today under existing law if you’ve bought a defective (“lemon”) car, and (4) prepares car buyers, dealers and workshops for compliance once the law lands.

1) What is a “lemon law”?

“Lemon law” is a consumer-protection framework that gives buyers of seriously defective vehicles clear remedies—typically a refund or replacement—after the manufacturer or dealer fails to fix the defect within a reasonable number of attempts or time. Many jurisdictions (e.g., US states, Singapore) have versions of this; details differ by country, but the core idea is consistent.

How other countries do it (quick comparison)

• United States: State statutes require automakers to repurchase or replace cars with substantial defects that can’t be repaired in a reasonable period (criteria vary by state). Malay Mail

• United Kingdom: No formal “lemon law,” but the Consumer Rights Act provides a short-term right to reject within 30 days and strong repair/refund rights within six months for faulty goods (including cars).

Singapore: “Lemon law” provisions in the Consumer Protection (Fair Trading) Act cover all consumer goods, including motor vehicles; defects within six months are presumed present at delivery unless the seller proves otherwise. Remedies escalate from repair/replace to price reduction or refund.

2) What has Malaysia actually announced?

• Policy move: The Government has said it will introduce a lemon-law framework in Malaysia by amending the Consumer Protection Act 1999 (CPA). This was highlighted during Budget 2026 statements in October 2025. Media and motoring industry reports confirm the intent and signal that detailed criteria and definitions are still being worked out.

Why this matters: It closes a longstanding gap where consumers relied on warranty processes and the Tribunal for Consumer Claims without clear statutory rights to refunds or buy-backs for irreparable lemons. NST Online – Lemon law on the table to protect car buyers

Industry stance: The Malaysian Automotive Association (MAA) publicly welcomed the move but stressed the need for clear definitions (e.g., what counts as a “major defect,” how many repair attempts, time limits).

Important: Until Parliament passes the amendments and they come into force, Malaysia does not yet have a lemon law. When the bill text is tabled, key operational details (attempts, timelines, coverage of used cars, etc.) will be finalised.

3) What might Malaysia’s lemon law look like (based on official signals & regional practice)?

While we must wait for the bill for specifics, expect the law to address at least these pillars (inferred from the announcement + regional models):

1. Scope & definitions

   • What qualifies as a “substantial” or “serious recurrent” defect.

   • Reasonable number of repair attempts (often 3–4) or days out of service thresholds.

   • Whether used/recon cars are covered, and any mileage/age limits.

2. Remedies & sequence

   • Repair first; if unsuccessful within the criteria, then replacement or refund (possibly with deductions for usage).

   • Clear timelines to act once a defect is notified. (Comparative references: US states/Singapore.)

3. Proof & presumptions

   • A burden-of-proof presumption window (e.g., the first six months in Singapore) could be adopted to reduce evidential hurdles for consumers early on.

   • Interface with financing/hire-purchase

   • Expect adjustments to ease claims on cars under hire-purchase, where title sits with the financier. The ministry has already worked with BNM to help consumers get consent letters for tribunal/court claims—this cooperation is likely to continue and be embedded.

   • Enforcement channels & limits

   • How lemon-law claims will interact with the Tribunal for Consumer Claims (RM50,000 jurisdiction limit; 3-year accrual) vs the courts for higher-value matters.

Note: The above is informed expectation, not yet statute. We’ll update once the bill text is published.

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4) Your rights today (before the lemon law takes effect)

Even without a dedicated lemon law, you have meaningful protections:

A) Consumer Protection Act 1999 (CPA) & TTPM

• CPA gives implied guarantees and bans unfair practices; disputes can go to the Tribunal for Consumer Claims (TTPM) for claims up to RM50,000, filed within 3 years of the cause of action. Filing fee is RM5 (online or at counters). Awards are binding (subject to limited High Court review).

B) KPDN’s interim measures for defective new vehicles

• Since 2024, the Domestic Trade Ministry (KPDN) has had an interim negotiation taskforce for new private vehicles ≤6 months old and still under warranty, plus cooperation with BNM to facilitate consent letters from financiers so owners can pursue TTPM/court claims despite hire-purchase title issues.

C) Courts (if value exceeds RM50,000 or complex remedies sought)

• Larger claims or those seeking relief beyond TTPM’s jurisdiction may go to the courts. (Sessions/High Court routes apply depending on claim value/relief.)

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5) Step-by-step: What to do if your new car is a “lemon” right now

1. Document everything from Day 1

   • Keep a log of symptoms, dates, mileage, weather, warning lights.

   • Save all job sheets, WhatsApp/email threads, and service-centre notes. This becomes crucial evidence for “repeated repair attempts.”

2. Give the seller/manufacturer a clear chance to fix it

   • Send a formal defect notice (email + registered letter) referencing CPA implied guarantees (acceptable quality/fitness) and your warranty terms. Set a reasonable timeframe to rectify.

3. Escalate to KPDN’s negotiation taskforce (if eligible)

   • If the car is ≤6 months old and under warranty, contact KPDN’s official channels to trigger the tripartite negotiation.

4. File at TTPM (if needed)

   • If unresolved, file a claim at TTPM (RM5 fee). Claim up to RM50,000 within 3 years. Consider reliefs like repair, replacement, refund, price reduction—frame them to fit TTPM’s jurisdiction.

     For financed cars (hire-purchase)

     • Ask your bank for a consent letter (KPDN/BNM initiative aims to streamline this). If refused or delayed, reference the 2024 KPDN announcement.

5. Exceeding RM50,000 or complex losses?

   • Consider a court claim (often via solicitors). Weigh litigation costs vs outcomes; sometimes a negotiated buy-back or replacement is faster.

What dealers & workshops should prepare (compliance playbook)

• Define “major defect” & escalation triggers internally now (even before law passes).

• Implement a 3-strike or X-days out-of-service cap that prompts management review and potential goodwill replacement/buy-back.

• Documentation discipline: Ensure every visit generates a detailed job sheet; avoid “no fault found” without diagnostics.

• Parts availability SLAs: Long parts delays could count toward “unreasonable time”—map critical parts and buffers.

• Customer comms: Assign a case manager for recurring-fault customers; written updates reduce disputes.

• Train frontliners on CPA obligations and upcoming lemon-law expectations. (MAA has already called for clarity—be early.)

FAQs

Q1: Will used cars be covered?
A: Unknown until the bill text is published. Some countries cover used cars (with conditions). MAA has urged the government to define coverage and criteria clearly.

Q2: How many repair attempts count as “reasonable”?

A: Not fixed yet in Malaysia. Elsewhere, 3–4 attempts or prolonged days-out-of-service are common thresholds.

Q3: Can I go straight for a refund now?
A: Under current law, you generally must allow repair first, then escalate through KPDN’s negotiation, TTPM (≤RM50k) or courts. A clear paper trail is essential. KPDN

Q4: What if my car is financed and title is with the bank?
A: KPDN and BNM have processes to help you obtain a consent letter so you can proceed with TTPM/court claims. Ask your financier and cite the KPDN announcement.