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An engine swap is simply removing the carâs engine and replacing it with another. The basic idea of an engine is to increase the vehicleâs horsepower without the loss of dependability. An engine swap can also be performed if the existing engine in the car has failed.
What is a 'Swap' A swap is a derivative contract through which two parties exchange financial instruments. These instruments can be almost anything, but most swaps involve cash flows based on a notional principal amount that both parties agree to. Usually, the principal does not change hands. Each cash flow comprises of one leg of the swap. One cash flow is generally fixed, while the other is variable, that is, based on a a benchmark interest rate, floating currency exchange rate, or index price. The most common kind of swap is an interest rate swap.