Is my dealership allowed to keep MY new car in order to wait for the Cash for Clunkers approval?

first of all, they shouldnt have signed you up that early to begin with. The cash for clunkers program didnt start until July 24th. Second, if they havent gotten the application in for the cash for clunkers by now, its too late. As of last night, it has been "put on hold" because the billion dollars is already gone.