Keith Roberts' car lot is full of clunkers.
That's because he's waiting for the federal government to reimburse him for the 50 gas-guzzling vehicles traded in under its surprisingly popular Cash for Clunkers program.
Roberts, general manager at Hoover Dodge Chrysler Jeep in Summerville, has lots of new cars too. But he's holding onto those old trade-ins until the feds ante up the money they promised under the program, officially the Car Allowance Rebate System program.
The program offers up to $4,500 to shoppers who trade in gas guzzlers for more fuel-efficient vehicles. Dealers pay the rebates out of pocket then must wait to be reimbursed by the government, but administrative snags have created a bottleneck in unpaid claims.
Of the 50 clunker deals Roberts has made since the program started July 27, he hasn't received a single reimbursement.
"We are on the hook for the money until the government pays up," he said. "We are holding onto the clunkers until then."
An informal survey from the South Carolina Automobile Dealers Association of 104 of the 290 dealers in the state earlier this week showed 2,331 clunker deals so far under the $3 billion federal incentive program to drive gas hogs off the road and stimulate car sales.
The federal government has sent back money to dealers for only 36 of those deals among the dealers who responded to the survey, said Pat Watson, the association's executive vice president. That's fewer than 2 percent of all clunker deals.
"A number of dealers have started to worry about not only when they are going to get paid but if they are going to get paid," Watson said Wednesday. "We would like to have a drop dead date. If a deal is done before this date, it's going to be paid."
He applauds the government for creating a "terrifically successful" sales stimulus program for the industry but said officials need to understand that businesses need their money to operate.
"If I have $100,000 on the street that is my money and I'm paying interest on it and they are not reimbursing me, that's not a good way to run a business," Watson said.
Roberts said he's talked with friends in the car business across the country and none of them have been reimbursed either.
"There are some dealers out there that are stopping the offer," he said.
About half of the 425 members of the Greater New York Automobile Dealers Association have stopped the rebate program because they can no longer afford it, said Mark Schienberg, president.
With less than two percent of dealers in his state being reimbursed as well, many have been left short on cash, Schienberg added.
Dealers claim the problem lies with federal officials overwhelmed by the program's smashing success. The White House announced Monday that by week's end it would triple its work force within the Transportation Department to try to process the clunker rebates at a quicker rate.
On Wednesday, U.S. Transportation Secretary Ray LaHood assured car dealers that they will be reimbursed.
"I know dealers are frustrated. They're going to get their money," LaHood said.
He added the Obama administration soon would announce how much longer the $3 billion car incentive program will last.
Through early Wednesday, auto dealers have made deals worth $1.81 billion and are on pace to exhaust the program's funds in early September. The program has generated more than 435,000 vehicle sales.
Hendrick Honda on Savannah Highway has been among the luckier dealers to be reimbursed.
Of the 100 clunker deals it has made, the West Ashley dealer has been reimbursed for 10 of them, said Tony Beasenburg, new car sales manager.
Still, Beasenburg said Honda officials told the dealer to proceed with sales but to do so cautiously.
"We may be cutting the program off before the government cuts it off because they are not flowing with the money," he said of the federal incentive that's set to run through Nov. 1. "It's kind of put brakes on itself because the government is not funding it and flowing the money like they said."
Beasenburg said Hendrick Honda normally carries a 90-day supply of inventory on its lot and is down to a nine-day supply. He's afraid some dealers might run into trouble next month when the 2009 models are gone and the 2010 models haven't arrived.
"September will be an ugly month on the new car side because we won't have the new car inventory," he said. "We will be hit with a gap."