17-10-2025
Planning your Iceland vacation can be exciting, but it can also be overwhelming, especially if you aren’t sure of the requirements for something like renting a car. As you start thinking about the natural wonders you want to see and how you will get to them, you’ll need to find the perfect rental car to meet your needs and budget.
Before you book your car, be sure to review the renting a car in Iceland requirements to be sure you’re ready to start exploring Iceland.
While some visitors prefer not to drive on their vacations, Iceland is the perfect place to do so. By renting a car in Iceland, you gain the freedom to go wherever you would like on your own schedule, spending as much or as little time as you need at each location. You can also be flexible with your plans if the weather or other issues require it.
When you book a tour, you’re bound by their strict schedule. If you finish looking around early, you have to wait for everyone else. Otherwise, you may feel rushed through a beautiful area where you could easily spend hours. By driving yourself, you get the advantage of complete control over your vacation, so you can travel the way you prefer.
In addition, renting a car is often more cost-effective than taking organized tours, especially if you prefer smaller group tours. You will also waste less time as you will stay in multiple locations throughout your journey rather than going back and forth to Reykjavík every day.
One of the biggest questions people have when choosing a rental car is whether they need a 4x4. Renting a 4x4 can be more costly, but it can also be useful, depending on the time of year you visit and where you plan to go. If you plan to only drive the Ring Road and other paved roads, a 4x4 isn’t entirely necessary.
However, if you’re planning a winter trip or want to explore the highlands of Iceland on the F-roads, a 4x4 is required. By booking one of these rental cars, you will open windows to see parts of the country that few tourists manage to see.
Knowing the requirements for renting a car in Iceland is essential to your trip planning. These requirements will dictate which type of vehicle you can rent and whether you can rent one at all. Here’s what you need to know when booking with Iceland Cars:
|
Requirement |
What It Means |
Quick Tips |
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Age to Rent a Car in Iceland |
The general age to rent a car is 20. However, 4x4 vehicles or luxury vehicles may require 23 or older. |
The question “How old do you have to be to rent a car in Iceland?” doesn't always have a black or white answer. If you don’t meet the requirements, travel with someone who does or ask about exceptions. |
|
Driving License Requirements |
If your license is in English or Roman characters, you don’t need an International Driving Permit. You must also have had a license for at least a year. |
Can you rent a car in Iceland with a US license? Yes, as well as many others. Unless your license uses non-Roman characters, you won’t need an IDP. |
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Payment Options |
At Iceland Cars, we usually require a credit card. There may be exceptions for debit cards. |
Using a credit card for your rental gives you the most protection. However, you may be able to use a debit card with a larger deposit or by taking full insurance. Please contact us at [email protected] for further details. |
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Insurance (CDW, SCDW, Silver Plan, Gold Plan, Platinum Plan) |
All of our rentals include CDW, but it’s often advised to take all insurance offered in Iceland. Read your contract carefully and document damage on pickup. |
Iceland’s conditions can easily cause damage to vehicles. Taking all insurance limits your liability, but keep in mind that wind damage, damage from river crossings, and undercarriage damage are often not covered. |
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Extra Driver Rules & Fees |
If you have a second driver, you will need to add them online or when you pick up your rental car. Extra fees apply. |
Allowing someone to drive without adding them as an additional driver will void your insurance if an accident occurs. |
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Fuel, Parking, & Tunnel Fees |
Fuel stations are located throughout Iceland. Many parking areas at popular tourist spots and one tunnel near Akureyri in the north require payment. |
Fill your tank whenever you see a fuel station to avoid running out of fuel. Tunnel fees should be paid within 24 hours to avoid high fees, although we recommend paying it in advance if you already know you'll cross it. You can do that online too. |
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Driving Restrictions |
Only 4x4 vehicles are allowed on F-roads. Off-road driving is strictly forbidden throughout Iceland. |
Most of our 4x4 vehicles can be taken to the Highlands roads. Remember that leaving a marked road or track is strictly forbidden and carries large fines. |
How old do you have to be to rent a car in Iceland? This is the first question most people have about renting a car. We at Iceland Cars require that drivers be at least 20 years of age to rent a car. However, if you’re planning to rent a 4x4 or another larger vehicle, we may require you to be at least 23 years old.
In addition to how old you must be to rent a car in Iceland, how long you have had your driver’s license can play a role. In addition to being 20 or 23, depending on the vehicle you want, you typically must have had your license for at least one year. A renewal is fine. You must be a licensed driver for at least a year.
The next question people have is, “Can I rent a car in Iceland with a US driver's license, or do I need an IDP (International Driving Permit)?” Most drivers will not need an IDP to rent a car and legally drive in Iceland. As long as your driver’s license is printed in English or uses the Roman alphabet, you will not need anything additional to drive as a tourist. So, can you rent a car in Iceland with a US license? The answer is yes!
Most rental car companies prefer for their customers to book the rental car with a credit card or at least have a credit card on file. This streamlines the process if there is a damage claim, any speeding tickets, or fines when returning the vehicle. Virtual cards are generally not accepted. However, some people wonder if there are other options when renting a car in Iceland.
Some rental agencies may allow renters to use a debit card or similar to secure their rental car, but in these situations, a hefty deposit may also be required to cover any incidentals that might occur during the rental period. Some companies may waive or reduce this deposit amount if the renter opts for full-coverage insurance. For the most part, a credit card is the preferred method.
The next important consideration when renting a car to get around is insurance. Many rental companies include Comprehensive Damage Waiver (CDW) insurance in the base rental price. However, when it comes to Iceland, there are other coverages to consider due to the unique conditions and dangers that exist when driving in this country.
It is often recommended to take as much insurance as the company offers to give you peace of mind when returning your vehicle. The following are some insurance options you should think about adding when renting with Iceland Cars:
Having more than one driver to switch off responsibilities can be a lifesaver for your trip. However, you can’t simply let anyone in the vehicle drive. You will need to add the person as an extra driver on your rental car, which often means an extra fee. The second driver must hold a valid license that is at least a year old and follow the same age requirements as the original driver.
Failing to add an extra driver and allowing someone else to drive can have serious consequences. If an accident occurs while the second driver is behind the wheel, the insurance automatically becomes invalid.
While self-driving adds flexibility and the ability to travel at your own pace, there are other costs to consider in your budget. The cost of fuel in Iceland can be expensive, but renting a car is still generally cheaper than booking tours for your entire stay. You will also encounter parking fees in the city, a few towns, and at many popular tourist destinations. One tunnel in the north outside Akureyri also charges a toll.
Be sure to pay your parking and tunnel fees as soon as possible to avoid excess charges. The fees for parking and the tunnel generally increase if they are not paid within 24 hours. The unpaid fees will then be charged to your rental company directly. When you return the vehicle, they will charge you the higher fee, plus a handling fee, making your parking fees many times higher. So be vigilant about paying them on time.
Renting a vehicle to drive yourself gives you the greatest amount of flexibility, but that doesn’t mean you can necessarily go everywhere with your rental car. Not all rental cars are allowed to drive F-roads. You will need to rent a 4x4 if you intend to drive any of these interior roads. However, pay close attention to the list of roads that are still not allowed. You should also avoid river crossings if you don’t have an appropriate vehicle or the experience.
Beyond the F-roads, it’s important to know that off-roading in Iceland is strictly forbidden. The landscape is delicate, and leaving the road can cause significant damage to the sensitive vegetation. Doing so results in high fines and potentially other consequences. Never leave the road, even if there is an obstacle in the way. Instead, turn around and return the way you came if you can’t overcome the obstacle.
Now that you’re familiar with the requirements for renting a car in Iceland, it’s time to choose the one that will best suit your needs. There are several guidelines to follow when selecting the perfect rental car. Consider whether you will need a 4x4 for gravel roads or winter driving. How many people are in your party? How much luggage will you bring?
Once you know what size vehicle you will need, you can start thinking about your budget and finding a vehicle that checks all the boxes. Be sure to check whether a vehicle is manual or automatic to avoid issues with driving, and consider the fuel efficiency.
Check the reputation of the rental agency you are considering. Ask about fees for changes or cancellations to protect the money you are spending.
A few car rental agencies are located in the arrival hall at Keflavik airport, but many of them are a short walk or shuttle ride from the terminal instead. When booking your rental car, make sure you choose the international airport in Keflavik, not the domestic airport in Reykjavík. The city is about a 45-minute drive from the airport you will arrive at.
You will most likely pick up and return your vehicle close to the international airport. Be sure to arrive early enough to complete the return process with enough time to get through security and passport control. Allow extra time for shopping in the Duty Free shops as well.
Some people opt to use their credit card insurance or a third-party insurance for driving in Iceland. Before doing so, be sure to ask whether they cover vehicles in Iceland and what exactly is included in the coverage. In most cases, you’ll have to pay damages upfront and seek reimbursement. It’s often more affordable to just buy the insurance through the rental company instead.
When booking your rental car, you’ll likely see several add-ons you can choose. Many visitors opt for a wi-fi box or GPS to help with navigation and connectivity. If you are traveling with a young child, you can also rent a child safety seat. Make sure you book anything you need ahead of time.
Always check the vehicle over carefully for pre-existing damage and take pictures and videos to document it. Check for a spare tire or tire repair kit and the condition of the tires. Ask the employees who to contact in an emergency or if something goes wrong with the car.
Now that you’re familiar with the requirements for renting a car for your Iceland trip, you can feel confident as you choose the right vehicle to meet your needs. Book your rental car in Iceland today and start planning the adventure of a lifetime!