The term, car lease penalty, can have several meanings as it relates to leasing a car.

It might refer to the “penalty” or “fee” for ending a lease early. Actually, there is no such fee, but rather a very precise way in which the remaining lease balance is calculated and charged to the customer who is terminating his/her lease. See Ending a Car Lease Early for more details)

The term can also refer to the lease-end charges for excess miles or damages. Again, these are not “penalties” as such, but actual costs that are calculated and charged to a customer after his/her leased vehicle has been returned. For example, excess miles are charged at a per-mile rate that is specified in a lease contract.

The term might also refer to the disposition fee that is charged at the end of a lease when the vehicle is returned. It’s a fee charged by all lease companies and is typically about $350. It pays for the cost of handling a car’s return, getting it ready for auction, and transporting it.

In summary, there are no actual “penalties” in car leasing, only well-defined charges to be paid in certain situations.