Penalty Settings are only available in Time Trial mode. To bring up the Penalty Settings menu, select 'Settings' -> 'Penalty Settings' from the Quick Menu. The Penalty Settings are as follows:

・ Shortcut Penalty
Set the level of penalty enforcement for when a driver takes a shortcut. Choose between ‘Off’, ‘Weak,’ and ‘Strong.’

・ Wall Collision Penalty
Select the penalty incurred when a car collides with a trackside wall. Choose between ‘Off,’ ‘Weak’, and ‘Strong.’