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All About Renting a Car In Iceland


Renting a car in Iceland guide

Planning an Iceland road trip? Exciting! With an Iceland rental car, you’ll be able to explore the spectacular natural scenery all across this incredible island without limitation and according to your own schedule.

What could be better than a road trip to visit glaciers, volcanoes and geothermal lagoons? Let’s discuss all you need to know about renting a car in Iceland, so you can get prepared for the adventure of a lifetime in the Land of Ice and Fire!

Why Rent a Car in Iceland?

Traveling by car is by far the best way to experience all the magical sights that Iceland has to offer. With the ultimate freedom and flexibility to explore to your heart’s content, you can drive across Iceland’s dramatic landscapes in your own time, discovering hidden natural wonders along the way.

Traveler with a rental car in Iceland

No waiting around or spending hours on crowded buses; simply jump in the driving seat and head straight to your destination. Some more remote locations in Iceland can only be reached by car, so if you’re planning any off-the-beaten-path adventures, you’ll definitely need a rental car to get there. For example, the stunning Westfjords region of Iceland is only accessible by car.

Renting a car in Iceland is the most cost-effective way to get around the island. Taking a public guided bus tour is usually expensive and also doesn't give you the freedom to follow your own itinerary. When traveling by car, you’re in the driving seat – literally and metaphorically!

How to Choose the Right Iceland Car Rental For You

When choosing the right Iceland car rental for you, there are a few important factors to consider, including what time of year you plan to visit Iceland and where you plan to go on the island.

Do I Need a 4x4 Vehicle in Iceland?

If you’re visiting Iceland in winter, or you plan to travel on any of the country’s mountainous F-roads into the Icelandic Highlands, you’ll need a 4x4 rental vehicle. Renting a 4x4 vehicle is recommended for winter trips in Iceland due to the extra stability these vehicles offer in the potentially harsh Icelandic winter weather.

Renting a 4x4 car in Iceland

Snowfall, heavy rain and strong winds are common during the winter season in Iceland, causing additional hazards for drivers. 4x4 cars enable you to maintain better control of your vehicle on icy roads, providing extra safety when driving around Iceland during winter.

A 4x4 vehicle is mandatory on Iceland’s F-roads, as the terrain of these unpaved, gravel roads is uneven and, therefore, difficult to drive upon. The F-roads can be found leading into the interior of the country, to the beautiful and remote Icelandic Highlands. If you’re a keen adventurer and want to explore this area of the country, a 4x4 vehicle is the right choice for you.

When visiting Iceland during summer, a two-wheel drive will most likely be fine for you, unless you plan to travel on any of the F-roads. With the milder climate and lack of snow and ice on the roads, summer makes driving in Iceland much easier.

F-Road driving Iceland

Important Things to Consider When Renting a Car in Iceland

What do you need to look out for when renting a car in Iceland? Here are some important factors to take into consideration when selecting your Iceland rental car:

Rental Company Reputation

Of course, the reputation of the rental company you choose is highly important. You can check Google reviews and websites like Trustpilot and Trip Advisor to read about other people’s experience of the company’s customer service. Doing a bit of online research beforehand will help you find a trustworthy and reputable car rental company.

Fuel Consumption and Efficiency

We recommend checking the fuel consumption of each rental car, so you can understand how much you might have to pay for gas during your Iceland road trip vacation. This factor is especially important if you’re on a tight budget, as you’ll want to choose the most fuel efficient rental car to help you save money on gas along the way.

Rental car fuel efficiency

Automatic and Manual Rental Car Options

While the majority of Iceland rental cars are manual transmission, as is standard in Europe, you’ll also be able to find automatic rental cars in Iceland if that’s your preference. You can explore the range of rental cars available in Iceland to make your choice between automatic and manual. Keep in mind that you’ll have a wider selection if you choose a manual car.

Changes and Cancellation Policy

It’s important to check what the change and cancellation policies are with the Iceland car rental company you choose, so you can make any necessary adjustments to your booking if they’re needed. We recommend checking out this policy before reserving your vehicle, as it’ll help give you peace of mind.

Insurance For Iceland Rental Cars

Insurance is mandatory when renting a car in Iceland. A basic insurance package is usually included as standard with your Iceland rental car with most companies, including Collision Damage Waiver (CDW) insurance. However, you can choose to purchase a more comprehensive insurance package.

Insurance for car rentals in Iceland

Due to Iceland’s unique and sometimes hazardous terrain, there are special insurance packages offered that protect against damage caused by gravel, volcanic ash and sand. You can determine whether this is necessary for you according to where in Iceland you plan to visit.

Sand and Ash Protection (SAAP) is a must if you plan on driving along the South Coast. Gravel Protection (GP) is also necessary if you plan on spending any time on F-roads or exploring Iceland’s Highlands. There are some unpaved sections of the main Ring Road, but they are few and far between. If you want extra coverage, you can opt for the Super Collision Damage Waiver (SCDW) insurance. Lastly, Theft Protection (TP) will cover you in the event of theft.

Your Iceland car rental company can offer you some advice about which locations these types of insurance are recommended for, as well as what insurance package will be most suitable for your trip.

Where to Pick Up and Return Your Iceland Rental Car

The two most popular places for picking up your Iceland rental car are Iceland’s Keflavik Airport – the main airport close to Reykjavik – and the capital city of Reykjavik itself. 

Reykjavik, Iceland

You can check with your Iceland car rental company where you can pick up and drop off your rental car, then choose the most convenient location that works for you. Whether you want to head straight from the airport off on your adventures or want to settle into your hotel in Reykjavik first, your Iceland rental car will be waiting for you!

What Do You Need to Rent a Car in Iceland?

When renting a car in Iceland, you’ll need to meet the following requirements and have the following documents:

  • Valid driving license – Most of Iceland's car rental companies require you to have held your license for 12 months.
  • Credit card – A security deposit may be required when renting a car in Iceland.
  • Be at least 20 years old – The minimum age to rent a car in Iceland is 20, although some companies require you to be 21 or 23.  

Guide to rental vehicles, Iceland

Ready to Rent Your Car In Iceland?

We hope you’re feeling as excited and inspired to take an Icelandic road trip as we are right about now! If you’re itching to hit the open road and discover Iceland’s many wonders for yourself, you can explore our range of affordable and reliable Iceland rental cars here. We look forward to welcoming you to our beautiful country soon!