The term lease penalty, in car leasing, usually refers to the extra fees charged at lease-end for excessive mileage or wear-and-tear.  Lease contracts specify a per-mile charge for any miles that exceed the total miles allowed for a lease. Although not as specific, contracts also state that charges will apply for excessive dings, scratches, unrepaired accident damage, broken or cracked glass, or non-working equipment. In most cases, a contract will specify the size of scratches or dents, and other damage that will be allowed before charges apply.

Lease penalties can be avoided if the customer chooses to exercise his purchase option at the end of his lease.