Toyota and Lexus offer SiriusXM 3-year payment option

Toyota and Lexus are teaming up with SiriusXM to offer a three-year audio package for a single lump-sum payment, abating customers' frustration with consistent monthly subscription fees.

Dealerships across the U.S. will be able to order vehicles with the longer subscription option and customers pay upfront for the in-built service. Otherwise, a vehicle will have the standard 3-month complimentary trial, which then gives customers the ability to subscribe at a monthly fee. 

"It gives dealers another opportunity to customize the vehicle for their local market," Brandon Olszewski, connected services and product manager at Toyota, told Automotive News. "Customers have told us for several years now that they prefer to pay for vehicle options upfront."

SiriusXM provides hundreds of channels, featuring music, talk shows and sports, and is estimated to reach around 150 million listeners monthly, according to the company's 10-K filing.

About 160 million vehicles in operation have SiriusXM radios for which they have the option of subscribing, and the in-car platform is available in 80 percent of new vehicles sold in the U.S., including brands such as Subaru, Jeep and Hyundai.

The cost for 33 months of SiriusXM services in a Toyota or Lexus vehicle is $350 and it will be launched across the entire new-vehicle lineup, bar five models, Olszewski said. SiriusXM's primary source of revenue is subscription fees, and as of December 2023, almost 34 million customers were signed up for its services.

Although many music subscription-based apps can connect to vehicle speaker systems via Bluetooth or an aux cable, Olszewski said, SiriusXM's uniquely curated playlists enhance the in-car audio experience.

"Live sports is another major area where SiriusXM sees very strong interest," he said. Toyota customers frequently continue their SiriusXM subscription after the three-month free trial ends, indicating a strong interest in a long-term commitment to its services, Olszewski said.

SiriusXM also provides additional data-driven features, including weather updates, fuel prices, sports schedules, movie listings and traffic information. In 2023, it upgraded its digital infrastructure, featuring a refreshed mobile app compatible with car systems such as Apple CarPlay to target younger users, who make up 25 percent of the listener market.

Toyota and Lexus recently launched their own Connected Services platform, allowing owners to start and stop the vehicle, lock and unlock doors and access the navigation system remotely with a three-year subscription model.

"That program has been quite successful, giving us additional validation that this business model is something the market is asking for," Olszewski said.