Payment Method Decider

---
name: payment-method-decider
description: Use to choose the right payment method (cashier's check, debit, credit card, financing, lease) for a car purchase given buyer's specific situation (card rewards, dealer POS limits, financing pre-approval, captive vs CU). Triggers include "cash or CC for car", "Visa for $30k purchase", "crypto cashback card rewards", "dealer POS limit", "Chase Sapphire car purchase", "支付方式", "买车用刷卡还是支票", and Spanish phrases "metodo de pago para el carro", "pago el carro con tarjeta o con cheque de caja".
---

# Payment Method Decider

> **Caveat**: this skill is one author's playbook + 5-scenario stress test. Verify state fees / CPO terms / EV credits / dealer practices against current sources before quoting numbers to a dealer or making financial decisions. Not tax, legal, or financial advice.
> **last_verified**: 2026-05-18 (Phase 3B sub-skill split from orchestrator)

Narrow helper for picking the payment instrument at close. Use when buyer asks "should I pay by X" or when dealer pushes a specific payment channel. Payment method is load-bearing for OTD math and CANNOT be silently swapped.

## When To Use

- Buyer asks "should I use credit card vs cashier's check"
- Card-rewards math (3% crypto-backed cashback, Amex, CSR, Citi DC) vs dealer surcharge
- Dealer claims POS card limit, buyer wants to push back
- Captive financing rebate vs credit union APR comparator
- Binding-constraint check on monthly cap vs OTD ceiling
- Lease cash / lease cap cost reduction routing

## When NOT To Use

- General OTD math without payment-method dimension - use `otd-calculator`
- Lease structure end-to-end - use `lease_playbook.md` first
- After purchase paperwork - use `close-day-checklist`

## Critical Rule

Payment method is LOAD-BEARING. Do NOT recommend financing to a cash buyer, or cashier's check to a buyer who wants card rewards. The buyer's chosen channel constrains:
- Dealer fees (some channels attach convenience fee)
- Effective OTD
- Negotiation leverage (cash often weaker than financing for back-end)
- Reward capture timing

If buyer's stated channel doesn't match the deal math, FLAG explicitly in heads-up.

## Decision Matrix (Base Costs)

| Method | Cost | Clearing | Dealer Pref | Notes |
|--------|------|----------|-------------|-------|
| Cashier's check | $0-15 | 1-3 days | High | Buyer-side mint at credit union |
| Personal check | $0 | 5-10 days | Low | Often rejected for >$5k |
| Debit card | $0 | Instant | Medium | Daily limit usually $5-10k; call bank to lift |
| Credit card | 2-3% surcharge >$5k | Instant | Low-Medium | See card math below |
| ACH (bank wire push) | $0-25 | 1-3 days | Medium | Buyer-friendly |
| Wire transfer | $25-50 | Same day | High | Best for time-critical close |
| Cash | $0 | Instant | Lowest | IRS Form 8300 over $10k |

## Card-Specific Math (Top Cards in Circulation)

Surcharge baseline = 3% (dealer-typical above $5k).

| Card | Earn Rate | Effective Value | Net vs 3% Surcharge |
|------|-----------|------------------|---------------------|
| Crypto-backed cashback, high tier | 3% cashback all cats | 3.0% | BREAK EVEN |
| Crypto-backed cashback, mid tier | 2% cashback all cats | 2.0% | NET LOSS 1% |
| Amex Platinum | 1x non-bonused | ~1.0% (best redemption) | NET LOSS 2% |
| Chase Sapphire Reserve | 1x non-bonused | 1.5-2.25% (transfer partner) | NET LOSS 0.75-1.5% |
| Citi Double Cash | 2% flat | 2.0% | NET LOSS 1% |
| Bilt Mastercard | 1x non-bonused | ~1.25% | NET LOSS 1.75% |
| Capital One Venture X | 2x | ~2.0% | NET LOSS 1% |

### When CC Actually Wins

- Dealer offers card with NO surcharge AND has high POS limit (rare, volume dealers)
- Buyer holds a 3% cashback card AND dealer surcharge is exactly 3% (true break-even with float + sign-up bonus value)
- Buyer is chasing a sign-up bonus minimum spend (e.g., $4k MSR for $750 bonus = 18.75% effective on that portion, easily worth 3% surcharge)

### When CC Loses

- Any card with <3% effective rewards vs 3% surcharge
- Dealer surcharge >3% (e.g., 3.5-4% common at independents)
- Buyer cannot pay statement in full (interest eats reward)

## Dealer POS Limit Reality

- Standard PCI-compliance default: $5,000 max single CC transaction
- Volume franchise (Toyota/Honda/Ford): $10,000-25,000 with GM approval
- Full-price CC: rare, usually requires GM override + auto-attached surcharge
- "Split" trick: some buyers split across 2 cards or 2 transactions; dealer may allow if total still under their absolute cap

If dealer cites $5,000 and buyer wants more: push for written confirmation BEFORE signing other docs. Common dealer move: agree verbally, then refuse at finance office.

## Captive Financing vs Credit Union Comparator

Scenario: captive APR > CU APR, but $1,000-2,500 customer cash rebate available ONLY with captive financing.

### Math

```
extra_interest = (captive_APR - CU_APR) * loan_amount * (term_yr / 2)
                 [approximation; use amortization for precision]

If rebate >= extra_interest: captive wins
Else: CU wins, take rebate's value as opportunity cost
```

### Quick Heuristic

On $36k / 60 month loan:
- $10 of rebate offsets ~1 bp of APR delta
- So $2,000 rebate offsets ~200 bp (2.0%) of APR delta
- If captive is 7.49% vs CU 5.49% (200 bp gap) with $2k rebate: BREAK EVEN; pick by other factors
- If captive is 6.49% vs CU 5.49% (100 bp gap) with $2k rebate: CAPTIVE wins by ~$1k

### Refinance Escape

Take captive financing to capture rebate; refinance with CU after 60-90 days. Verify:
- No prepayment penalty in captive contract
- CU will refi same-day-old loans (most do)
- Captive doesn't have "rebate clawback" clause for early payoff (rare but exists)

## Binding-Constraint Math

When buyer states BOTH a monthly cap AND OTD ceiling, check which actually binds:

```
max_financeable = (max_monthly - 0) * (1 - (1 + APR/12)^(-n)) / (APR/12)
effective_OTD_ceiling = max_financeable + down_payment
```

Compare against buyer's stated OTD ceiling. If within $500, FLAG in heads-up: "monthly cap is the real binding constraint, not OTD ceiling."

### Worked Example

Buyer: $700/mo max, $5k down, OTD ceiling $42k, 60mo @ 5.49% APR.
- max_financeable = $700 * (1 - (1.004575)^-60) / 0.004575 = ~$36,200
- effective_OTD_ceiling = $36,200 + $5,000 = $41,200
- Buyer's stated $42k ceiling is NOT the binding constraint - $700/mo is.
- Must negotiate to OTD $41,200 or lower, OR raise monthly cap, OR extend term.

## Lease Cash / Lease Cap Cost Reduction

Some manufacturers offer $1,000-3,000 lease cash that flows through ONLY as cap cost reduction (not as down payment, not as rebate to buyer). This OEM lease cash is ordinary marketing money and is still live in 2026, verify it on the worksheet and make sure it shows as a cap cost reduction line, not pocketed by the dealer.

> **Federal §45W lease pass-through is TERMINATED (acquired after 2025-09-30, OBBBA).**
> The old play, lessor captures the federal §45W $7,500 commercial credit and passes it
> through as cap cost reduction (~$104/mo over 60mo, ~$208/mo over 36mo), is **dead for
> any 2026 lease**. There is NO federal $7,500 lease credit to capture or to watch for on
> the worksheet. If a 2026 worksheet shows an "EV lease credit," it is OEM lease cash /
> marketing money, NOT a federal credit; treat it as a negotiable OEM incentive and do
> NOT count it as a federal incentive in OTD / monthly math. See the CRITICAL banner in
> `ev-buyer-helper`. (Historical: pre-2025-10-01 acquisitions could still claim §45W.)

See `../orchestrator/references/lease_playbook.md` for full lease structuring.

## Heuristic Flowchart

1. Cash buyer, no rewards play -> cashier's check from CU
2. Cash buyer with 3% cashback card + 3% dealer surcharge -> CC up to dealer cap, cashier's check for remainder
3. Cash buyer chasing sign-up MSR -> CC for the MSR portion, cashier's check for rest
4. Financing buyer, manufacturer rebate available -> captive (with refi escape plan)
5. Financing buyer, no rebate, CU pre-approved at lower APR -> CU outright
6. Lease buyer -> follow lease_playbook.md (NOTE: federal §45W pass-through TERMINATED 2025-09-30; any "EV lease credit" in 2026 is OEM lease cash, not a federal credit)

## Cross-References

- `../orchestrator/references/payment_methods.md` - full reference
- `../orchestrator/references/lease_playbook.md` § captive rules
- orchestrator Phase 1 Critical Rule: "Payment method is load-bearing"
- `otd-calculator` skill - for downstream OTD recomputation after method change

## Worked Example

A buyer wanting single-transaction Visa for ~$33k at a dealer.
- Action item 1: confirm dealer POS limit for single transaction (likely $5-10k cap, needs GM override for $30k+)
- Action item 2: confirm convenience fee rate (3% typical = ~+$1k on a $33k purchase)
- If 3% fee AND buyer holds a 3% cashback card: BREAK EVEN, deal goes through net-neutral on payment method
- If fee >3% OR card is not 3% cashback tier: split into card portion + cashier's check, or all cashier's check

## Voice Note

Do NOT silently change payment method between Phase 6 negotiation and Phase 9 close. If buyer said "cash" in Phase 1 and dealer pushes financing in Phase 9, FLAG as load-bearing change - rerun OTD with new assumptions.