(MONEY Magazine) – Few experiences are as satisfying as driving a brand-new car off the lot. Until the dealer calls a week later to say your loan application was turned down by the bank and, ahem, if you want to keep the car you'll have to pay a higher rate. As if you really have a choice. So you sign a new contract with less favorable terms. When done deliberately, this cruddy little practice is called yo-yo financing.

What does the dealer get out of this car-loan switcheroo? A fatter commission from the lender. Carl Ragsdale, a spokesman for the 20,000-member National Automobile Dealers Association, insists that what car dealers want most is a satisfied customer—and this is not the way to get one. "I'm not going to tell you this doesn't go on," Ragsdale concedes, "but if it does happen, I think it's an error."

Some error. The Washington, D.C. consumer group Public Citizen reports receiving more than 1,000 complaints about this lending practice in the past year. Laura McDowall, a lawyer for a firm in Akron, says she gets a yo-yo financing complaint at least once a week. "If it happened once in a blue moon," she says, "then you could say it was a mistake."

Always arrange financing before you set foot in a dealer's showroom. And don't take possession of the car until the ink on the loan is dry. —JOAN CAPLIN