SiriusXM Making A Bigger Push in Used Cars

Sirius XM Holdings' growth over the past several years has come largely on the back of new car sales. It's managed to get its technology into about three of every four vehicles that roll off the assembly line, and agreements with the automakers have been effective in turning new owners into subscribers.

But, according to John-Erik Koslosy writing for The Motley Fool, Sirius XM executives have been devoting an increasingly larger share of their attention on used cars. And if there's any doubt as to why, there are two numbers from the second quarter that should make it abundantly clear.

• Free trials activated by new-car buyers: down 3%.
• Free trials activated by used-car buyers: up 18%.

Somewhere around 17 million new vehicles should be sold this year. So Sirius XM technology should make its way into somewhere around 13 million new cars that hit the road. The problem for Sirius is that many of those new-car buyers may have already tried the satellite-radio service and either subscribed or decided it wasn't for them.

And Sirius has essentially hit its saturation point with new vehicles. The cars that its technology is not in are cheaper models, for which buyers are less likely to pay for audio content. That limits the growth potential on the new-car front.

The used side is a much different picture. More than twice as many used cars are likely to change hands, and many of those buyers will be seeing Sirius XM technology for the first time.

So as the company looks to ramp up in the used market, it sees big growth ahead there.

In just one year's time, the number of Sirius XM-equipped used cars that were sold grew by 12%, according to the company. They made up close to three of every 10 used cars that changed hands over the first six months of 2016, Sirius says.

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