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Since the government-led car scrappage scheme came to an end in March of this year, many car dealerships have taken up the savings mantle with a variety of ‘swappage’ schemes. These schemes enable drivers to trade in cars over eight years old for new ones in the same way as the scrappage scheme did - but how can you be sure you’re getting a good deal if you go for one?

Devious discounting

Under the car scrappage scheme, car dealerships were able to afford to offer new cars at discounted prices thanks to government funding. With no further government support available, car swappage schemes have to be funded by the dealership themselves - resulting in costs being clawed back from you the buyer in other ways.

Checking your APR

A common way for car dealerships to claim back some of the ‘discount’ they’re offering, is by tying customers into unfavourable loan agreements. These are often not as easy to spot as you might imagine, as the loans are often quoted with low-sounding interest rates masking exorbitant APRs with high set-up fees and other charges.

Many 0% finance deals also turn out to be anything but when you take into account the set-up, insurance and documentation fees involved - not to mention the large deposit required.

Hire and lease purchase

It also pays to be wary of hire purchase deals which sound like an affordable way to spread the cost of a new vehicle. In practice these can be very expensive and also mean that your car remains the property of the dealership until the last payment is made - enabling them to reclaim it should you miss a payment.

Lease purchase deals can also seem an attractive proposition initially. Over time however, they can prove to be a drain on your resources and can leave you with a large bill if you decide to keep the vehicle at the end of your contract.

In summary

If you do decide to go for a swappage scheme, make sure you do your homework first. Don’t be afraid to ask lots of questions of each dealership and compare the deals of as many garages as possible. You might also want to look into the cost of purchasing a new car without trading in your old vehicle as you may quickly realise that the swappage price is not quite as good as it looks!