Newer vehicles are undeniably safer, cleaner and more environmentally responsible. Advances in structural crash protection, braking systems and active safety technologies have transformed modern cars into significantly more protective mobility solutions compared to those produced two decades ago. At the same time, improvements in engine efficiency and emissions control have reduced pollutants and greenhouse gas output, aligning with Malaysia’s long-term sustainability goals, including its commitment to achieving carbon neutrality by 2050. In this context, the government’s RM4,000 incentive encouraging owners of vehicles over 20 years old to retire their cars represents a timely and practical intervention.
From a road safety perspective, the rationale is clear. Vehicles designed more than 20 years ago were built to standards that fall well behind current safety expectations. Many lack features such as Electronic Stability Control, comprehensive airbag systems and modern crash energy management structures, while child safety provisions like ISOFIX anchorages were not widely available. Encouraging the gradual replacement of these ageing vehicles helps reduce exposure to outdated safety features and can lower the risk and severity of injuries in road accidents. Even small improvements in overall vehicle safety across the fleet can lead to meaningful public health benefits over time.
Environmental considerations further strengthen the case for such an initiative. Older vehicles typically operate under Euro 2 or earlier emission standards, whereas newer models in Malaysia must comply with Euro 4 or Euro 5 requirements. This results in a significant reduction in harmful pollutants such as nitrogen oxides, hydrocarbons, carbon monoxide and particulate matter. As higher-emission vehicles are phased out, urban air quality is expected to improve. While reductions in carbon dioxide depend on factors such as engine type and driving patterns, newer vehicles generally offer better fuel efficiency and lower emissions per kilometre, supporting both national climate goals and local environmental improvements.
However, the economic implications require careful consideration. Owners of vehicles that are more than 20 years old often come from lower-income households, where keeping an older car is driven by necessity rather than preference. These vehicles are usually fully paid off, have lower insurance costs and do not involve monthly instalments. Even with the RM4,000 incentive, replacing a vehicle may introduce new financial commitments that could strain household budgets. This concern is valid and highlights the need for policies that take affordability and accessibility into account.
That said, the financial comparison is not always straightforward. Ageing vehicles often come with hidden and rising costs. Older engines tend to be less fuel-efficient and may require more frequent servicing, including regular oil top-ups. Maintenance intervals become shorter, breakdowns occur more frequently and repair costs can be unpredictable. In addition, spare parts may become harder to source over time, making proper repairs more difficult or expensive. These accumulated costs can gradually offset the perceived savings of keeping an older vehicle.
When viewed more holistically, upgrading to a newer vehicle may help stabilise long-term mobility expenses. Improved fuel efficiency, reduced likelihood of major breakdowns and fewer unexpected repairs can provide greater cost predictability. For households already facing high spending on fuel and maintenance, transitioning to a fixed monthly repayment structure may not significantly increase their overall financial burden.
At the industry level, the initiative could help stimulate demand for new vehicles and support the country’s Total Industry Volume. Its benefits extend beyond manufacturers to the broader automotive ecosystem, including suppliers, dealerships, service providers, insurers, logistics companies and financial institutions. The automotive sector continues to play a significant role in the economy through job creation, technological development and investment opportunities.
In conclusion, the RM4,000 vehicle retirement incentive represents a positive policy direction with clear safety and environmental advantages. While concerns around affordability, particularly for lower-income groups, should not be overlooked, the increasing inefficiencies and maintenance challenges associated with ageing vehicles must also be recognised. The long-term success of this initiative will depend on ensuring that the transition towards safer and cleaner mobility is not only encouraged but also practical and accessible for all.
Ir Dr Rifqi Irzuan Abdul Jalal is an Associate Professor at the School of Engineering, Faculty of Innovation and Technology at Taylor’s University, specialising in vehicle technology, electrification and mobility systems. He also serves as an Executive Committee member of the Society of Automotive Engineers Malaysia.
