Malaysia to get Lemon Law this year? The feasibility is certainly gaining pace!

KUALA LUMPUR: The Ministry of Domestic Trade and Cost of Living is initiating a thorough feasibility study on the adoption of a Lemon Law within this year, aiming to significantly bolster consumer protection in the automotive industry.

As reported by The Star and emphasized by Minister Datuk Armizan Mohd Ali, the proposed Lemon Law aims to establish a framework for consumers to seek remedies for vehicles that do not adhere to promised quality and performance standards. This legislation is designed to ensure accountability and provide consumers with a clear course of action for addressing their grievances with defective vehicles.

This initiative places Malaysia in line with international standards, echoing consumer protection laws in countries like the United States and Singapore. The Lemon Law would offer various remedies, including repair, replacement, or compensation, enhancing the existing consumer rights under the Consumer Protection Act 1999.

The momentum for implementing the Lemon Law in Malaysia has increased due to reports of new cars from reputable brands, such as Perodua, leaving the factory with defects.

This situation has caused significant inconvenience for buyers, who find themselves burdened with hire purchase loans while their vehicles are unusable for extended periods.

Many affected consumers have turned to social media to voice their frustrations about receiving vehicles with issues from the get-go, complaining about manufacturers' slow or negligent responses to their problems.

Given the common practice in Malaysia of taking out nine-year car loans, ensuring the reliability of a purchased vehicle is critical, as buyers are committed to their choice for a long time.

A vehicle developing issues shortly after purchase is far from the ideal start for any car owner. Introducing the Lemon Law could hold automakers more accountable, an urgent need as cars become increasingly high-tech, bringing a higher risk of faults.

This legislation aims to protect consumers and ensure they receive the quality and performance they are promised.

According to NST, AmInvestment Bank reports that 80% of Proton and Perodua buyers choose loan periods up to nine years, a trend prevalent among moderate to lower-income demographics.

These vehicles are seen as essentials rather than luxuries, with purchases influenced by monthly installments and interest rates, particularly the Overnight Policy Rate (OPR).

The bank notes a surge in car loan applications, especially for the Myvi model, amidst supply chain disruptions boosting used vehicle demand. 

Interest in Battery Electric Vehicles (BEVs) is rising, particularly among higher-income groups, attracted by tax exemptions and perceived as luxury weekend vehicles.

Also Read:  Malaysian government considering Lemon Law to fight against defective vehicles