KUALA LUMPUR, Oct 17 — During Budget 2026, Prime Minister Datuk Seri Anwar Ibrahim announced plans for amendments to the Consumer Protection Act to include Lemon Law elements, to ensure protection for consumers.
Anwar said the proposed legislative changes come on the heels of the tabling and enactment of the Consumer Credit Act — a landmark piece of legislation aimed at regulating Malaysia’s rapidly growing credit services industry.
Proposed amendments to existing laws are not new, as the Domestic Trade and Cost of Living Ministry has previously emphasised the need for a comprehensive consumer protection framework that aligns with current demands.
With Putrajaya now moving forward to enact the changes, renewed discussions have surfaced on the need to establish clear definitions and criteria for what constitutes a “lemon” vehicle, including limits on repair attempts and timeframes.
Particularly, some confusion remains regarding the distinction — and the extent of consumer protection — between a “lemon law” and a warranty.
Related but not the same
Warranty by definition is a written guarantee from the manufacturer issued to a purchaser of an item, promising to repair or replace defectiveness if necessary under the warranty terms.
For instance, you are entitled to a free repair or replacement should an electrical appliance you purchased malfunction within its warranty period.
Generally, the conditions, limit on number of claims and covered issues are outlined in the respective warranty document of an item.
On the other hand, the lemon law usually provides legal protection to consumers who purchase new or second-hand vehicles with serious, recurring defects that manufacturers are unable to fix after several attempts.
If the vehicle is deemed irreparable after a reasonable number of repair attempts, the buyer may be entitled to a refund or replacement.
For instance, if your new car’s engine keeps failing and the manufacturer is unable to fix it after three or four tries, the lemon law may require the car company to replace the car or refund you.
Where have lemon laws been applied?
Lemon laws or their equivalents exist in quite a few countries, although the scope and enforcement differ widely.
The most established and well-known system is in the US, where the term “lemon” — an American colloquialism — refers to cars of such poor quality that they leave buyers as disappointed as someone biting into a sour lemon.
As different iterations of lemon laws exist across all US states, consumers can often obtain a replacement or refund through arbitration or the courts.
Although the exact criteria vary by state, US lemon laws generally require automakers to repurchase or replace vehicles with significant defects that cannot be repaired within a reasonable period.
In the UK, consumers’ rights are protected under the Consumer Rights Act, even though the country has no formal equivalent of a lemon law.
Known as the ‘short-term right to reject’ under the Act, buyers may reject a significantly faulty car within 30 days for a full refund, or exercise the “final right to reject” after 30 days but within six months of purchase if faults persist despite numerous repairs.
In Singapore, a ‘lemon law’ provision is laid down in the Consumer Protection (Fair Trading) Act where consumers can make a claim for a defective product sold to them within six months of purchase.
Singapore’s version of the lemon law covers all general consumer goods sold — including electronics, furniture, motor vehicles, apparel, and stationery. However, it does not apply to services, business-to-business transactions, or consumer-to-consumer sales.
If a seller is unable to repair or replace a defective product within a reasonable time, or if doing so would incur unreasonable cost, consumers may request either a price reduction or a refund for the defective product.
