It can mean that, but it can also be used elsewhere. For example, you might hear in conversation "whoah now, back it up!! What did you just say?' Although you are following up with telling the person to repeat themselves, the 'back it up' expression is telling the person to go back in conversation and then depending what you follow up with, will tell them what your concern is. E.g. 'Back it up, I don't quite understand', 'Back it up, you lost me at hello' etc. It's very casual and informal, so do not use it in a formal setting.
Also, to 'back it up' on a dance floor is to go backwards so it's not just cars haha :)