“Backup contracts are sometimes used by dealers to lock you into the purchase. This could be an honest dealership that’s been burned before and just wants to cover their behinds. In other cases, this could be a shady deal.
Either way, don’t sign any document that could potentially raise your financing rate fourfold. Instead, have the dealer call your bank to verify that you were approved for the loan.
If the dealer doesn’t want to do it or is strong-arming you into signing the backup contract, walk away. Remember that as the buyer, you have all the power. Exercise it if need be, and never sign anything that doesn’t feel right.”