Operator
(Operator Instructions) John Murphy, Bank of America.
John Murphy
Good morning, guys. I just wanted to ask a first question around sort of the obvious -- on tariffs, and just maybe from three specific angles, if you could comment as best you know right now. First, what kind of commentary are you getting from your factory partners?
Second, if you think about the pull-forward in March and early April, what you're seeing outside of your stores, maybe inside of your stores on pricing of GPUs because it doesn't seem like you've been taking advantage of stuff there yet, but there's certainly stories of other folks.
And then third, what kind of impact do you think the uncertainty has around M&A activity and pricing?
Jeff Dyke
It's Jeff, John. From a manufacturer's perspective, this is all balls in the air right now. No one really knows. Parts are coming in from out of the country on American-made cars, and so for us, it's just steady as she goes. We had a great first quarter. We think we're going to have a great second quarter, and we believe based on conversation with the manufacturers over the next 90 days, that things will settle down.
Is there going to be a price increase? Maybe, but we don't see it as being a 25% price increase, and we've had price increases before and we've faced a lot tougher situations than this. And the industry is Teflon from my perspective, we'll battle our way through this.
We just are not watching the news. We're putting our head down. We're going to work. We're very focused on executing our playbooks, our processes, and we think those results showed up in the first quarter and we'll see what happens in the coming months ahead, but I'm not -- and our team is not too concerned that we won't have solid resolution over the next 90 days or so and I think the manufacturers will end up participating if the tariffs come along in some sort of cost-cutting measure to help with MSRP pricing.
Maybe the dealers and the consumers have to participate a little bit, not sure yet, and hopefully the governments will come along and get a hold of this. But at the end of the day, it's not some massive concerns. In terms of M&A, it hasn't really made a huge difference at this point. We've got a lot of discussions going on.
Certainly, it's come up. If anything, maybe we're buying a little bit of time just to kind of see what happens over the next 90 days before we finalize some transactions, but no big changes there from our perspective.
David Smith
And John, this is David. I think one thing to mention about pricing because I think you alluded to it, is that some dealers out there are, I think, taking advantage of the situation and taking advantage of customers and we're definitely not doing that. The highest guest satisfaction we've ever had and we want to keep it that way and so we're doing more market pricing and not gouging our customers.
John Murphy
I appreciate the balance for you. Maybe we just one quick second one on fixed ops. I know you guys were a little slow on headcount hiring last year. Just curious if there's any update there, and what kind of opportunity you think there is to ramp up that hiring process and [really], sales a lot higher?
Jeff Dyke
At the end of the day, since last March, we've hired 345 incremental technicians in the organization and that's made a huge difference for us in terms of fixed ops. So we'll continue to hire as we grow through the year. We've got capacity with open stalls and bays for those technicians that we're hiring, and it's been a huge focus for us since the end of the first quarter last year when we sort of put our stake in the ground and changed our culture and our fixed operations departments to focus on bringing in more technicians as a part of our culture and driving our growth.
And I think the results have proven that in the last four or five quarters.
David Smith
And we've had a number of stores where we're opportunistically growing our service. We're building new stalls, adding stalls, so there's definitely opportunity to grow.
Danny Wieland
A quick reminder on that, John, we added about a third of those headcount in the last two months of last year and so we're still really trying to get those newly hired or newer hired technicians to full productivity. So there's still some runway there. And right now with the additional warranty and recall activity we're seeing, there's a lot of volume running through the service lanes.
So as we go forward and get those technicians fully productive, we'll be better to balance, better able to balance the customer pay and warranty side of the business as long as these warranty tailwinds persist.
John Murphy
Super helpful. Just want to follow up on that. I mean, if you think about the opportunity, a lot of it is volume or because you're in the high class, you have the high-class problem of too much demand that you might see door rates inch up a bit?
Jeff Dyke
I mean, we're looking at our door rates on a quarterly basis, John, that's something that's been ongoing for forever. No, the demand of volume is there. There's just plenty of volume from a fixed perspective and we're taking advantage of that. And there are more techs to be hired, and our culture's taken over.
We're not having to push so hard to hire techs. The culture's taken over and our teams are out bringing in techs and they see the results. It's made a big difference. And again, that's been a year in the making of really changing our store level culture from a fixed operations perspective to get us to where we are, and as David and Danny said, there's a lot of upside there.
John Murphy
Volume and price opportunity?
Jeff Dyke
Yes.
John Murphy
Okay.
Heath Byrd
Just one point, John, and speaking of tariff impact, services is one of those areas where we can pass that along to the consumer. So that's another opportunity we think if there are tariff issues, people are making a buy versus a repair decision that can help that and we can pass along the tariff increase to the consumer.
Operator
Bret Jordan, Jefferies.
Patrick Buckley
Hey, good morning, guys. This is Patrick Buckley on for Bret. Thanks for taking our questions.
On the used side, could you talk a bit more about what the GPU trajectory looks like from here? I guess it's Q1 above the '25 outlook, once we start modeling in contraction and what's driving that?
Jeff Dyke
I mean, it's just sort of an unknown right now based on what's going on with the tariffs. If nothing changes and things are steady as she goes. I mean, the margins that you saw in the first quarter should hold true on the franchise side throughout the end of the year. And EchoPark's margins are growing. We're buying a larger percentage of our cars off the street.
We've moved from 20% to 25% up to 30% to as high as 35% of the cars now on a weekly basis coming from street purchases. That's making a big difference in our front margins, and that really helped out in March of the first quarter and it's carrying over in April, and that's a change for us. So front end margins are improving there, and we expect that to continue.
Patrick Buckley
Great, thank you. And then I guess, on BEVs, have you seen any changes year to date with the current administration and just a little shake up as far as mandates? And I guess, what's the current outlook there on inventory versus demand?
Jeff Dyke
Yes, it's dropping. We have less supply. Everything positive there. I mean, the thing is that now inventory levels are beginning to get closer to matching what consumer demand is, and that's where it should be.
David Smith
The demand is lining up with --
Jeff Dyke
With the inventory levels, right? And so we're applauding that. We're having to carry less inventory that doesn't turn as fast. We think the manufacturers are coming around, and that's the new administration that's supporting that, and that's a big applause from this team.
Heath Byrd
And you can see in the front-end GPUs, we had a headwind of around [350] and the full year of 2024 is down to 200 in Q1, so aligning that inventory to demand is helping reduce that headwind in BEV GPU.
David Smith
And we think you know some of our manufacturer partners are doing a great job with offering vehicles that -- where it's really speaking of customer demand, the customer gets to select their drivetrain. And that strategy is a great strategy. So if they want an electric vehicle, they can choose an electric one or if they want an ice, they can choose that. We like that strategy.
Operator
Jeff Lick, Stephens Inc.
Jeff Lick
Good morning, gentlemen. Thanks for taking our question. First one is, I wonder if you could break down the warranty works of service and parts work a little bit as it relates to warranty customer pay. I know you're getting into a little bit, but just what the metrics were in terms of warranty growth and as it relates to the comp and customer pay?
Jeff Dyke
Yeah, about 40% warranty growth in the first quarter versus the 2% to 3% customer pay growth. That's not a mix we like at all. It's an adjustment that we're making. We need to -- a lot more focus on getting our CP customers through the lanes and pushing the warranty work out a little bit, and those are adjustments that you'll see us make in the second quarter.
That's just too big of a differentiator in the mix between warranty and customer pay for our liking, and there's a lot of warranty work out there that can't be helped, but we need to adjust in terms of that mix coming through our lanes.
David Smith
And we think it's a great sign that our team, you may want to mention that they already highlighted and noticed that, it wasn't like that we just noticed.
Jeff Dyke
Yeah, the team towards the end of the first quarter is saying, look, this is just not the mix of revenue coming through the service drive, it's not the mix we like. We need to start making some adjustments and those adjustments are being made. And we've got the technician headcount now to handle that, and that's growing. So put all that together and we think we can pivot pretty quickly in how that mix is coming through the service drive in the second quarter.
Jeff Lick
Is there evidence, or do you have ways to track kind of the occurrence of crowding out customer pay because of the warranty? I mean, do you see yourself even inadvertently turning away customer pay jobs in lieu of -- in favor of warranty?
Jeff Dyke
Not intentionally, but it's common sense. I mean, if you've got that much warranty coming through, it's easier work, it's higher margin, everybody's taking the licks at that. It's not the right way to run the shop. You need to load the shop differently.
We know that there's a lot of warranty that hit us all at the same time, and service rider can take a warranty job in, technician can flip it and get another one real quick because there's another one standing in line. And so we're not doing the additional service requests and the things I think from a playbook perspective that we should do.
We've got to slow down and execute at a higher level. It's great to have the warranty work. It certainly played a big role in our quarter from a fixed perspective, but we can do a better job in making sure that we're balancing customer pay and fix, the right customer pay and warranty the right way and loading the shop appropriately and we're making those changes.
David Smith
Yeah, I would say it's more of rather than saying turning customers away, it's more of scheduling properly.
Jeff Lick
And just a quick one on EchoPark, and this is kind of just hypothetical, if you think about a tariff scenario where let's just say the [SAR] does go down, pick your number 1 million units, 1.5 million because prices rise, and obviously that's going to come at the franchise dealers, there'll be less trade-ins where franchise dealers tend to get more of their supply through trade-ins.
I'm just curious. I could see either way how this could affect EchoPark. Obviously, EchoPark is the whole premise, it's a value proposition. When you think about the puts and takes of all the different dynamics in terms of less stuff going through the auction lane and whatnot, do you guys view a tariff scenario as beneficial to EchoPark, or would it be a headwind?
Jeff Dyke
Well, we've seen this video before, right? I mean, we played this out in '20 and '21 and '22 with COVID. And we're prepared for it. That's why you're seeing us buy a lot more cars off the street. We think we can push that up even higher, maybe to 40% to 45% level. It's just turning knobs. We are really in shape for something like this where I would say that we were not when COVID hit.
And so it could have been a headwind if this was 2020, but we don't look at it like that now. We're very prepared and just had an amazing first quarter with EchoPark. We look to have another one in the second quarter, April shoring up that way. So in prices at the auctions are already up over $1,000 a car from what we're seeing and buying. But margins are continuing to grow, volume solid, so I don't see it being a big problem.
David Smith
Also if you think about it, we've noticed that in -- especially in our mature markets, as you may have heard on our previous call, our EchoPark stores have the number one reputation.com scores in the industry. So we're seeing where a lot of repeat customers, their friends and family coming to EchoPark and those people as you've seen our gross is going up.
People are identifying EchoPark and saying we want to go there and buy a car and just choosing to go there first, and we're seeing that in our numbers. So I think that our team will adapt, so prices go up.I still think that customers will pay for that amazing guest experience.
Jeff Lick
Not just the sourcing, obviously sourcing could go up, but if your demand goes up, and your value proposition goes up, even your prices could go up, but your value proposition relative to the alternative could actually widen. That's what I was trying to get at.
Jeff Dyke
100%. We saw that in March and we're seeing it in April, and we're still going to be in the marketplace. Even if our price is $1,000 higher, everybody else is going to be a lot higher, including our own franchise stores. It's just the difference in the model, and we really have that dialed in.
In particular around the inventory management, they supply how fast we're moving inventory through the system, 20 to 22, 23 days supply on lot. We're turning those cars in 12 days just as fast as they can go, and we don't -- the inventory is not fitting. And so it just (technical difficulty) between what we saw in '21 through '23. (technical difficulty)
We're a lot smarter and more nimble than we were even 24, 36 months ago. 415 cars are rooftop and in March every store profitable and the big EchoPark stores are among the most profitable that we had in our company. And so we we've got it dialed in and now the question is, can we get inventory to stabilize a little bit because once we do that, we can start opening some stores, and we're hopeful that towards the end of the year, the beginning of next year, we can start announcing, hey, we're going to bring a strategy that shows you how we're going to grow the footprint of EchoPark.
David Smith
And it's worth mentioning that our new EchoPark store in Houston, for example, we've gotten, speaking of things we've learned is we opened that store, and I think it went off like very efficiently, we've got a mature team in there and they did 400-plus cars like in their second month.
Jeff Dyke
And have been profitable since day one, which is a great sign.
Operator
Rajat Gupta, JPMorgan.
Rajat Gupta
Great. Sorry, I have just one more follow-up on EchoPark here. The first quarter is also obviously pretty strong here. It looks like you did take up your full-year guidance, but maybe it seems a bit conservative in context of how strong the first quarter was.
It looks like you feel good about the EchoPark retail GPU, the F&I, and maintained your unit guidance. I'm curious, like, why isn't the guidance higher than the range you provided based on the first quarter start -- (technical difficulty)
Jeff Dyke
(technical difficulty)
Rajat Gupta
Sorry, there might be some issues with my line, but I'll try again.
Jeff Dyke
We heard your question.
Rajat Gupta
Oh, you did? Okay, great.
Jeff Dyke
Can you hear us?
Rajat Gupta
It broke up like in the response, but I can check the transcript. Maybe it's on my line, but I'm not sure if others have got it, but if you want to repeat the answer, that's fine, and you said one on SG&A.
Jeff Dyke
That's no problem. We said you sound like our Board of Directors yesterday in our Board meeting asking the exact same questions. And look, the tariffs are playing a role in our forecast there. We'll get a lot more, we can get more aggressive if things play out the way we think they're going to from a tariff perspective and they turn positive, but we need to be conservative there, Rajat, so we don't get out ahead of ourselves if things do get tighter from a used car pricing perspective.
And so if further adjustments, as we get into announcing the second quarter if things play out the way we think from a tariff perspective.
Rajat Gupta
Understood. That's helpful. And then just an SG&A, one of the things I've noticed in your print and some of the peers that are reported, we did see a little more deleveraging in the first quarter than maybe at least what I had been expecting and maybe some other investors might have been expecting.
Some of your peers talked about like some weather headwinds in January, February, a couple lower selling days that might have caused that. I was curious if there's anything you would want to call out on the SG&A if the leverage was in line with your expectations or was it worse or better? And also, have there been any pay plan or commission type adjustments within the workforce that's maybe driving the SG&A higher and which could be more sticky?
So just wanting to unpack all of this a little bit, if possible. That's all I have. Thanks.
David Smith
I could just mention that in our data from our kickoff to the year, we had a big focus on SG&A and expenses and throughout the company in our annual meeting and we think that that's taking effect as you see it in the numbers.
Heath Byrd
Yeah, I'm just going to mention there are a few things that our first quarter one times, we had some compensation that was just for the first quarter that will be driving that up. But there's nothing that's material. There hasn't been any changes to pay plans that would have caused that. It's really just your first quarter things that we clean up in the first quarter such as payroll taxes or higher, et cetera. But nothing systematic that is going to be going through the next three quarters of the year.
Rajat Gupta
Understood. That's helpful clarification. Thanks a lot and good luck.
Danny Wieland
And maybe one final point on that, we reaffirmed our full year consolidated company SG&A target in the low 70% range. And so there's going to be some puts and takes as to what comes from the franchise and what comes from EchoPark as we go through the year, and obviously depending on how the tariff situation plays out on demand and volume is a big driver of sales compensation, the variable compensation piece.
But overall, we're still in line with what we anticipated for the year through the first three months.
Heath Byrd
And I think it's interesting to point out that this quarter, EchoPark is 18% of growth, it was lower than the franchise, and that just shows you as the volume and the gross increases, you have more money that flows to the bottom line quicker because of the fixed expense structure that we have at EchoPark.
Rajat Gupta
That makes sense. Thanks again and good luck.
Operator
Daniela Haigian, Morgan Stanley.
Daniela Haigian
Hi, thanks. Well, more on EchoPark and apologies if you answered this earlier. I also had some connection issues, but you mentioned anticipating an increase in used pricing, uplift to demand as a result of tariffs with newer used vehicle supply still tight, even with the mitigating factors like diversifying your sourcing and off lease incrementally improving the next year or so, do you see opportunity moving into older used vehicles to meet some affordability concerns as well?
Jeff Dyke
I mean, we did that during COVID, Daniela, this is Jeff. We did it during COVID. It's a small percentage, it's 10% to 15% of the overall volume, maybe even less at times. And sure, we would flex that way if we need to. We haven't seen a need to do that yet. And remember, we reduced the number of stores that we had, so we're down to 17 EchoPark stores. We can buy enough inventory to support those stores both off the street and trades and through the auction lanes.
So I'm not too concerned about getting inventory. We'll watch pricing and adjust the mix accordingly, but if we need to, no question, we can increase the percentage of 5, 6, 7, 8, 9, 10-year-old vehicles. It just adds complexity to the business when you do that. Recount times take longer.
There's just a lot of complexities, and we're trying to stay away from that because complexity is not part of the EchoPark model, but it's certainly something that we have the capability of doing and we did during the COVID years.
Daniela Haigian
Thanks.
Operator
Michael Ward, Citi Research.
Michael Ward
One thing we haven't touched on is that if we get these price increases for tariffs, you get a corresponding increase in the residual values of vehicles coming off lease, particularly at the luxury end, the import luxury end.
How fast do those residual values adjust?
Jeff Dyke
I mean, they will adjust quickly, Michael, but we're still dealing with the lack of lease returns from lack of sales in the --
Michael Ward
Okay, next question. Did you have any line of sight on that? When does that start to turn the other way?
Jeff Dyke
Next year, you'll start to see an adjustment, but not in this calendar year, no way.
Michael Ward
So if anything, some of those vehicles coming off lease this year, the lower supply, you'll get a pretty big increase in the residual that should help on the CPO side and offsite?
Jeff Dyke
It can, yes, it can.
Michael Ward
Okay, to help mitigate it. Okay. All right. And then one last thing on EchoPark, you kind of alluded to the timing of considering reopening some of the locations could be at the end of the year. If you do, it sounds like you're going to showroom traffic has picked up, you're certainly your costs are in line and some of the other things.
If necessary, can that be accelerated or you still just going to wait and see before you turn the keys back on?
David Smith
Yeah, I can tell you that our team, as Jeff mentioned earlier, we've learned a lot from the pandemic and how to open stores and when to open stores, and I think you're going to see that in the future quarters that if these -- if our performance continues the way it did in this quarter, you're going to see us opening some stores and we found that we can very efficiently open them like the one in Stafford for example, which by the way was that particular location that Jeff Dyke was the General Manager at that location.
But once we acquired that location from the time we did the opening, it was a very short period of time and it was off to the races as I mentioned earlier in the call. Within a couple of months we're selling over 400 cars out of that location. So once we get ramped up and get going again, you're going to see we we're able to do it.
Jeff Dyke
And this is Jeff, we've got, obviously properties, facilities that we own that are ready to go, things that we can go pull the trigger on. There needs to be some stability here. We were laughing the other day. Keep throwing it at us. We're Teflon, we can handle anything. And so this is tariffs, what the hell? Who cares?
It's honestly an important message I think for the street and our team, is to understand we've got a lot of leather on our skins. We've been through this before. We've seen a lot of curveballs thrown at us. It'd be nice to have a year to have just straight, let's go sell some cars and service some cars and have some great guest experience and build the great technologies, but we'll deal with it and we seem to always find the rose here in the garden and we'll do that again with this little gig that we're facing.
So we'll see. It's going to be a fun year. We're going to sell a lot of cars. EchoPark's going to be great, but a few bumps in the road, so to speak.
David Smith
Our EchoPark Chief Operating Officer, Tim Keen, is not here with us today because his daughter's getting married this weekend, but we can tell you that Tim has been on the road looking at potential locations recently that we're really excited about. So we'll have more on that in the future.
Michael Ward
Well, it sounds like you planned it out properly back when you made those decisions to give you the flexibility. Thank you.
Operator
(Operator Instructions) Chris Pierce, Needham & Company.
Chris Pierce
Hey, good morning, everyone. Can you just walk me through -- I think the question that was asked earlier on used vehicle GPU, I just want to make sure I understand the assumptions when I look at first quarter recent history, and then the guidance. Is it that because prices might go up and you still want to move units in the industry, it will take a lower GPU or is there's something I'm missing? I just want to make sure I understand the puts and takes there.
David Smith
Meaning GPU or margin percentage, from a franchise perspective? A dollar GPU from a franchise perspective, well, something crazy happens with the tariffs. We ought to be in the same ballpark that we're in now. I think we're at $1,500 and something that's kind of -- we've been operating for years now in the $1,500 to $1,400 to $1,600 range, somewhere in that $1,500 range we're going to be from a franchise perspective, I don't see that really changing.
But I do see EchoPark's front-end margin getting better historically because of the percentage of cars that we're buying off the street and we're trading for versus the percentage of cars, the mix is changing that we're getting from the auction. That's now a 70/30 mix, the 65/35 mix. It was an 80/20 mix and just by definition, if you're buying cars off the street, you're going to have better margin.
Heath Byrd
Yeah, and this is Heath. One thing to add, I think the disconnect here is one of the big issues is that you have seasonality and so as we go through the years and we do the quarters, you're going to have certain quarters that are historically lower and so you're going to end up like we said between that $1,300 and $1,500 range.
Chris Pierce
Okay, and then just lastly, one on EchoPark F&I per retail vehicle. If I look at the number of this quarter and then look at the guidance, I mean, was there some -- is there seasonality based on the type of customer you see in the first quarter that takes a higher percentage of warranty or pays a higher interest rate so you can sell off the loan at a higher amount? I just want to understand because it looks like the per vehicle number comes down through the rest of the year to get to the guidance of EchoPark.
Jeff Dyke
Yeah, honestly, we're probably being conservative there. We're executing at a really high level from a warranty penetration perspective. We've done some cost work on what we're paying for warranties and managing that better. That's flowing in other products. Those are flowing to the bottom line.
So our F&I performance is just stronger, and I would project that it's going to continue to be stronger.
Chris Pierce
Okay, just to clarify that you're saying that you're seeing price advantages from your third-party warranty providers and that's flowing through?
Jeff Dyke
We're seeing price advantages from moves that we've made with our third-party warranty providers that's flowing through the to the bottom line. Yes.
Chris Pierce
Okay. Perfect. That's everything from me.
David Smith
Again, it's also important to emphasize again that our team, our EchoPark team is delivering the number one guest experience in the industry. So there's no doubt that that's reflecting in the numbers.
Chris Pierce
Perfect.
Operator
Thank you. And we have reached the end of the question-and-answer session. I would like to turn the floor back to David Smith for closing remarks.
David Smith
Thank you, everyone. We'll speak with you next quarter. Have a great day. Thank you.
Operator
And this concludes today's conference. You may disconnect your lines, and we thank you for your participation. Have a great day.
