Considering that nearly 800,000 new vehicles were sold in Malaysia last year, there is a real need for buyers to be protected and that they have legal redress. This figure excludes used-vehicle sales, which significantly surpass new-vehicle sales. — IZZRAFIQ ALIAS/The Star
THERE are currently no laws in Malaysia that enable vehicle purchasers to demand a refund or an exchange for a defective vehicle.
However, this may change soon as the government is considering the introduction of a “lemon law” to enhance buyers’ rights. This proposed law aims to ensure accountability, transparency and fairness, following several incidents earlier this year that exposed weaknesses and loopholes in consumer protection.
Considering that nearly 800,000 new vehicles were sold in Malaysia last year, there is a real need for buyers to be protected and that they have legal redress. This figure excludes used-vehicle sales, which significantly surpass new-vehicle sales, Yamin Vong, a veteran auto journalist reckons.
According to him, Malaysia is among the few countries without a lemon law.
“There are a few laws but nothing like what is needed to compel new car sellers to compensate a buyer within a reasonable time,” he says.
With several cases highlighted on social media earlier this year, the issue is not as simple as it seems. There are concerns over the waiting period for repairs and the all-important issue of the vehicle owners still needing to pay their hire-purchase loans while unable to use the vehicle.
Then there is the inconvenience of arranging alternative transportation, whether for personal or commercial purposes.
Electric vehicles (EVs) also present their own set of challenges, being newer to the market. Likewise, used vehicles also need to be covered by the lemon law.
“We are not talking about squeaks and scratches, we are talking about substantial defects such as dashboard warnings instructing the driver to stop driving or cars that intermittently stall while in motion,” Vong says.
He shares the experience of an owner of a premium EV from a European marque that suffered a critical drivetrain failure, rendering it inoperable for a significant period, despite immediate reporting and numerous follow-ups. The owner of the EV car also highlighted the significant gaps in consumer protection for owners of such vehicles.
While lemon laws are specific to vehicles, Malaysia is looking to expand them to include other categories of goods. According to the Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali, the study on the proposed lemon law — which started in June and is scheduled to be completed in September — involves experts who are also looking into other products that fail to meet quality and performance standards.
In a reply during Ministers’ Question Time in Parliament on July 3, the minister said the results of the study will determine whether the existing legal framework needs to be improved or if a new law should be enacted.
At present, consumer redress laws are provided under the Consumer Protection Act (Act 599), Contract Act 1950, Sale of Goods Act 1957 and Hire-Purchase Act 1967. Armizan had previously announced that the government planned to introduce a lemon law or amend existing laws concerning defective vehicles by next March.
Vong emphasises the urgency of addressing the issue, especially with the recent influx of new automobile brands into the Malaysian market.
“There are some 10 new automobile brands that have entered Malaysia over the past two years and they have launched some 17 new models. A lemon law is urgently needed to protect new vehicle buyers from unreasonable delays in car repairs,” he says, adding that many buyers do not have the resources nor the time to seek legal recourse.
“The ball is in the court of the Domestic Trade and Cost of Living Ministry. This issue has been plaguing customers for years. A lemon law would be straightforward in this case. No need to look far, just look at Singapore, Australia or UK,” he says.
For local context, Singapore can be a good reference point since Malaysia is studying the implementation of a comprehensive lemon law with a more substantial mandate. The city-state’s lemon law was enacted in 2004, covering transactions involving all general consumer goods from apparel and stationery to furniture and vehicles.
This article first appeared in Star Biz7 weekly edition.
