If we are giving a discount of .25% for auto-pay set-up on an auto loan, fixed rate, no cost to apply...will the APR end up lower then the Rate?

If you are discounting the interest rate by .25% why would the APR be lower than the interest rate?

It should be on an adjustable rate note with the trigger that if it comes off auto pay the rate increases.

That is why i am inquiring. I see this in this instance and it does not make sense to me.

Well something is probably wrong, but unless you give us an example, it is very hard to say what it is.

Ok, this is a fixed rate so that is why i was confused

Even though the interest rate may be "fixed", if your "auto pay" service agreement is properly drawn, the .25% discount will terminate if the customer cancels the auto pay feature. From Reg. Z's perspective, if a loan contract allows a contingent rate increase, the TIL disclosure must reflect this feature as an adjustable rate.