DETROIT — While many dealers are halting CARS deals due to the government's slow approval and reimbursement, General Motors thinks it may have found a solution to keep dealers in Cash for Clunkers business.

The automaker announced today that it will immediately begin providing cash advances on qualifying new-vehicle sales.

Thanks to this, GM said its dealers will have the liquidity to run their businesses effectively and continue to push CARS sales.

The automaker also indicated that it will provide advances for qualifying new-vehicle sales already transacted under the government program, and continue forwarding funds to dealers as long as the program remains in effect.

"If the dealer elects to take an advancement from General Motors, the dealer will receive immediate funding," Susan Garontakos, a spokesperson for GM, told SubPrime Auto Finance News this morning.

"It's up to the dealers to decide if they want to capitalize on this or not," she added, noting that there is an option in the internal GM system for dealers to request advances.

More specifically, John McDonald, another GM spokesperson, told SubPrime Auto Finance News, "The dealer sends GM the government invoice number from the CARS application with their request for a cash advance. Once a week, GM will credit their open account for the advance."

What about CARS transactions that are ultimately rejected by the government but GM advances are given?

According to Garontakos, "We can't predict what might happen. But we have confidence that the government will make good on what they said they will do. We are doing this in good faith to make sure customers get the vehicles they want (under the program)."

McDonald added, "Dealers are required to ensure vehicles are eligible for the CARS rebate and will be required to pay back any GM money advanced to them within 30 days."

Mark LaNeve, vice president of U.S. sales, explained, "Our sales performance in the past two months has exceeded our internal forecast by over 60,000 vehicles, largely driven by the CARS stimulus program,"

"We want to do all we can to provide customers with timely new-vehicle deliveries and dealers the liquidity they need to run their businesses. This will continue the sales momentum of our new fuel-efficient vehicles such as the Chevrolet Cobalt, Equinox and Buick Enclave," he continued.

This GM news comes just as concerns arise in the industry over the $3 billion in funding for the program running out. Reports indicate that the Department of Transportation is expected to issue a wind-down plan any day.

For instance, just yesterday evening, the National Auto Dealers Association issued an update on the CARS program saying that, "Although, according to press reports, (Transportation) Secretary LaHood stated today (Wednesday) that ‘there will be no car dealer that won't be reimbursed,' NADA believes that this is based on DOT's view that sufficient funds remain available.

"It is important to note that NHTSA has confirmed elsewhere that if the program's money runs out before a dealer is reimbursed, that dealer will not be paid," NADA officials stressed.

"In view of the foregoing, dealers who accept additional ‘clunker' deals face a growing risk that they may not be reimbursed," NADA executives cautioned.