Govt To Introduce Malaysia’s First ‘Lemon Law’. Here’s What It Means For You

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During the tabling of Belanjawan 2026 last week, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim proposed a significant amendment to the Consumer Protection Act 1999

The government plans to amend the Act to incorporate elements of a lemon law, aimed at protecting consumers' rights when it comes to automotive purchases.

So, what exactly is this 'lemon law' that was just announced?

Here's what it means:

A 'lemon law' is a type of consumer protection law designed to help people who buy defective products, most often new cars, that consistently fail to meet quality and performance standards. The term 'lemon' is a colloquialism for a product that is of poor quality and frequently causes problems.

The core principle of a lemon law is to protect consumers from the financial burden and frustration of a faulty new car.

This law typically applies when a new car has a significant defect affecting its use, safety, or value, and the manufacturer or authorised dealer has failed to fix the same issue after a reasonable number of repair attempts.

It can also apply if the new car has been in a repair shop for a cumulative number of days due to various defects.

What happens when I purchase a 'lemon'?

If a vehicle or product is determined to be a 'lemon', the law generally provides the consumer with one of three remedies.

The consumer may be entitled to a full refund of the purchase price, though a deduction could apply for the vehicle's usage.

Alternatively, the law may offer a replacement of the defective product with a new, functioning one.

Finally, the consumer may be provided with a price reduction or another form of compensation if a refund or replacement is not possible or reasonable.

The lemon law has been under discussion for quite some time

In March 2024, The Star first reported on a government feasibility study into a possible lemon law. At the time, Datuk Armizan Mohd Ali, the minister of the Domestic Trade and Cost of Living Ministry (KPDN), stated that the study would address several loopholes in the Consumer Protection Act 1999.

Following a six-month legal study, KPDN later announced in May this year that it had drafted a cabinet paper proposing amendments to the Act that would include provisions for a lemon law, according to The New Straits Times.

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