Budget 2026: Govt Confirms Introduction of Lemon Law in Malaysia

Prime Minister Datuk Seri Anwar Ibrahim has confirmed that the government will move ahead with introducing “Lemon Law” provisions in Malaysia. Announced during the tabling of Budget 2026, he said the Consumer Protection Act will be amended to include elements of Lemon Law, following the enactment of the Consumer Credit Act.

This marks an important step forward for consumer rights, especially for Malaysians who have long struggled with defective or faulty new cars. The move is part of the MADANI government’s commitment to strengthening consumer protection and ensuring fair treatment for buyers who often find themselves at a disadvantage when faced with unreliable products.

The announcement builds on earlier efforts by the Domestic Trade and Cost of Living Ministry (KPDN), which has been working on a proposal to introduce Lemon Law into Malaysia’s legal framework. 

The ministry has also been gathering feedback from key agencies including the Finance, Transport, and Economy Ministries, the Attorney-General’s Chambers, and the Ministry of Investment, Trade and Industry.

The proposal follows a detailed six-month study carried out from June to Nov last year, which reviewed how Lemon Laws operate in other countries. The study found that Malaysia’s existing laws do not provide enough protection for buyers who end up with defective vehicles, especially in cases where repairs fail to fix the problem or where manufacturers and dealers refuse responsibility.

Currently, consumer recourse depends on a mix of existing laws, including the Consumer Protection Act, the Contracts Act, the Sale of Goods Act, and the Hire-Purchase Act 1967. However, these are often fragmented and unclear, making it difficult for affected consumers to seek fair compensation.

With the Prime Minister’s latest announcement, the long-awaited Lemon Law finally appears to be on its way to becoming reality. Once enacted, it will offer Malaysian consumers clearer, stronger, and more enforceable rights, especially in the purchase of new cars and mark a major milestone in the country’s consumer protection landscape.