Types of Subscription Models: Products Lease

The subscription business model is a business model in which a customer pays a recurring price at regular intervals for access to a product or service.

It’s a common model across many industries , from digital products like software (SaaS), media like newspapers and streaming services, consumables like coffee or meal kits, to physical products such as bikes, furniture, or electronics.

There are many variations of the subscription model, including:

• Product Subscriptions
• Product Rentals
• Product Leases
• Product-as-a-Service
• Subscribe-to-Own (Subscribe-to-Buy)
• Pay-per-Use
• Subscribe & Save
• Membership

This article explains Product Leases; how they work, where they exist, and why more and more businesses are adopting this model.

circuly supports all types of subscription-based business models including product subscriptions, product rentals, product leases, rent-to-own, membership, product-as-a-service, and pay-per-use.

What Is a Product Lease?

A product lease is a business model that gives customers long-term access to a product for a fixed contract period in exchange for recurring payments.
Ownership of the product remains with the business during the lease term, but customers often have the option to buy the product, renew the lease, or switch to another product once the contract ends.

Leasing typically applies to high-value, long-lifespan products such as vehicles, equipment, or electronics, where customers prefer predictable costs and the flexibility to upgrade regularly without taking on full ownership risk.

Subscription vs. Rental vs. Lease

Leasing as a concept has existed long before modern rentals or subscriptions. Historically, leasing was used for vehicles, heavy machinery, and business equipment, industries that required access to expensive assets without the burden of ownership or depreciation. For instance, car leasing has been around since the early 1900s and remains one of the most common and enduring examples of long-term product leasing.

Today, however, the term lease is also used interchangeably with subscription or rental, especially in consumer-facing businesses.

In the UK, for example, many companies use the word “lease” to describe what is essentially a subscription-based model for physical products. This overlap often exists because of customer familiarity: “leasing” is a well-understood term associated with access, predictability, and fixed monthly costs, even when the underlying mechanics are closer to a subscription.

Examples of Product Lease Businesses

• BMW Financial Services, Volkswagen Leasing, and Sixt Leasing – classic examples of car leasing with options to renew or buy.
• Hilti Fleet Management – offers tool leasing to businesses, including maintenance and automatic upgrades.
• Philips Medical Systems – leases advanced medical imaging equipment with included service contracts.
• Nespresso Professional – leases coffee machines to offices under fixed-term contracts.
• Feather and CORT – long-term furniture leasing for homes and offices.
• Apple Financial Services and Dell Technologies – business leasing for IT hardware, allowing upgrades and replacements at end of term.
• John Deere Financial and Caterpillar Financial – long-term leases for agricultural and construction machinery.

These examples show how leasing spans from B2C products like furniture and vehicles to complex B2B assets like industrial machinery.

Why Product Leasing Exists

Product leasing exists because it gives both businesses and customers predictability and flexibility. For customers, leasing eliminates the need for large upfront investments, provides access to high-value assets, and includes services such as maintenance or insurance within a single predictable monthly payment. For businesses, leasing generates stable recurring revenue, keeps ownership of valuable assets, and strengthens long-term relationships with customers.

Leasing is particularly relevant in industries where:

• The product has a long lifespan and retains residual value after multiple contracts.
• Customers prefer use over ownership but need access for extended periods.
• The cost of ownership (purchase, depreciation, maintenance) is high.
• Regular upgrades or technology changes make ownership less appealing.

Leasing is also a cornerstone of circular business models, as products are maintained and reused across multiple leasing cycles rather than being sold once and discarded.

Using the Term "Lease" to Describe a Subscription Model

In the UK, and increasingly across Europe, many businesses use the word lease to describe what is functionally a product subscription. This is often a strategic choice: leasing is a familiar term that signals reliability and long-term access, while subscription is still perceived by some customers as something for digital products or short-term services.

However, using lease to describe a subscription-based business model comes with a few important considerations that go beyond language.

1. Legal and regulatory clarity

In some markets, a lease is legally distinct from a subscription.
Leases may fall under consumer credit or asset financing regulations, which come with obligations around credit checks, interest disclosure, and end-of-term rights. If your model does not transfer ownership or create a financial obligation over a fixed term, it may not qualify as a legal lease.
Before adopting the term, ensure your contracts, terms, and compliance align with your actual business mechanics.

2. Customer perception and expectations

Customers in the UK associate leasing with long-term commitment and predictable monthly payments. If your model allows cancellations, swaps, or renewals, you should communicate this flexibility clearly to avoid confusion. Transparency helps customers understand that while the experience feels like a lease, it carries the convenience of a subscription.

3. Operational structure

Leases are traditionally fixed-term agreements with pre-defined end-of-contract processes (buyout, renewal, return). If your model offers flexibility — such as early upgrades or short notice periods — your internal systems, billing, and asset tracking need to accommodate these variations. Make sure your backend operations support the subscription-like behavior you are promoting under the leasing label.

4. Marketing and positioning

The choice between calling your offer a lease or a subscription should depend on your audience. For B2B or high-value B2C products (vehicles, machinery, electronics), leasing may convey professionalism and trust. For lifestyle or consumer convenience products, subscription may better communicate flexibility and ease. Whichever you choose, consistency across marketing, contracts, and user experience is key.

5. Future adaptability

As the subscription economy matures, the boundaries between leasing and subscriptions will continue to blur. If your business might expand across regions, consider how your terminology translates. For example, what’s called a lease in the UK might be positioned as a subscription in Germany or the US. A clear internal definition of your model helps you stay consistent and compliant internationally.

In summary, using lease to describe a subscription model can make perfect sense from a customer understanding point of view, as long as your legal framework, communication, and operations reflect the flexibility you actually offer.The key is to use the term strategically, not superficially.