31-01-2025
Did you know that nearly 80% of Iceland's visitors choose to rent a car to explore the country? With unpredictable weather, gravel roads, and strict driving laws, renting the right vehicle can make or break your trip.
In this guide, you'll get essential Iceland car rental tips to help you navigate safely, avoid costly mistakes, and make the most of your journey. Find out whether you need a 4x4, which insurance is a must, and how to save on fuel and rental costs. Plus, learn how to handle F-roads, windstorms, and speed limits so your Icelandic road trip is stress-free.
If you really want to experience Iceland without feeling rushed, renting a car in Iceland is the way to go. You get to explore on your own schedule instead of being stuck with tour group itineraries or limited bus routes.
Want to pull over for a waterfall that's not on the typical tourist trail? No problem. Feel like taking a detour to a remote hot spring? Go for it. Iceland's best spots aren't always easy to reach, and having a car means you can chase the Northern Lights, drive scenic coastal roads, and visit hidden gems most tourists miss.
If you want to experience Iceland on your own terms, getting a rental car in Iceland is your best bet. The country's best routes are made for road trips, letting you stop whenever something catches your eye.
Some of the most scenic drives include:
Trying to decide between renting a car or booking guided tours? It all depends on how you like to travel. Iceland is much easier to explore when you have full control over where and when you go, but tours can be convenient, too. Let's break it down.
| Category | Renting a Car in Iceland | Tours |
|---|---|---|
| Pros |
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If you're planning a road trip, this guide to Iceland car rental will make the process easy. Renting a car sounds simple, but in Iceland, there are a few things to keep in mind to avoid headaches.
When planning a trip to Iceland and thinking about renting a car, make sure you meet the requirements before booking.
Check your rental company's policies in advance so there are no surprises when you pick up your car.
Iceland's roads can be rough, and rental car insurance isn't just a good idea; it's a must. Windstorms, gravel roads, and sudden weather changes can turn a simple drive into an expensive problem if you're not covered.
Here's what's usually included:
For extra protection, consider:
These add-ons cost more, but if you're heading off the beaten path, they can save you from major expenses later.
If you want to save money and avoid last-minute stress, these Iceland car rental tips will help you book at the right time.
Have a credit card ready for the deposit, and bring your booking confirmation when picking up your car. A little planning goes a long way.
| Iceland Cars Fleet Vehicle | Low Season Price | High Season Price |
|---|---|---|
| Toyota Aygo | $33/day | $59/day |
| Duster 4x4 | $39/day | $75/day |
As you can see in the table above, prices during the low season can be dramatically lower, making it a great time to explore Iceland while saving money. If you're flexible with your travel dates, you can take advantage of these significant discounts and enjoy a more budget-friendly adventure!
If you're planning on driving in Iceland, get ready for some of the most scenic roads in the world. But Iceland's unpredictable weather and rugged terrain can make things tricky if you're not prepared.
If you plan to hire a car and explore Iceland's highlands, you'll need to be extra prepared. F-roads are rough mountain tracks that can be thrilling but also risky if you're not careful.
If you're planning to drive around Iceland, knowing the speed limits and rules can save you from hefty fines. Iceland takes road safety seriously, and speed cameras are everywhere.
✔ Drive on the right and overtake on the left
✔ Keep headlights on at all times, even during the day
✔ Seatbelts are mandatory for everyone in the car
✔ Never stop in the middle of the road for photos; always find a safe pull-off
Driving on the roads in Iceland can be tricky, especially when you hit gravel or get caught in a windstorm. Both can make driving dangerous if you're not prepared.
If you plan to visit Iceland and rent a car, having the right navigation tools will make your trip much smoother. While traditional GPS devices work fine, mobile apps offer extra features that can be a game-changer.
Pro tip: Download offline maps before your trip since some areas have little to no internet. A little prep goes a long way in making your drive stress-free.
Planning your budget? These Iceland car rental tips will help you avoid surprises. Rental prices can add up quickly, so knowing what to expect will save you money and stress.
Car rentals in Iceland aren't cheap, and prices vary depending on when you visit. Car rental companies charge the highest rates in summer, but there are ways to save if you plan ahead.
✔ Book early – Some car rental companies offer up to 20% discounts for early reservations.
✔ Choose a fuel-efficient car – A smaller vehicle is cheaper if you're sticking to paved roads.
✔ Look for package deals – Some rentals come bundled with accommodations or tours for extra savings.
When renting from a car company in Iceland, you'll need to decide between unlimited mileage or a mileage cap. The right choice depends on your travel plans.
✔ No restrictions – Drive as far as you want without worrying about extra fees.
✔ Ideal for long trips – Perfect if you're driving the Ring Road or heading to remote areas.
✔ Better value for extended rentals – While it may cost more upfront, it often saves money in the long run.
✔ Short trips – If you're only exploring Reykjavik or the Golden Circle, for example, you may not need unlimited miles.
✔ Lower upfront cost – Rentals with mileage limits can be cheaper if you stay within the cap.
Iceland's distances are often greater than expected, so always check how much driving you plan to do. A car company may charge high fees for exceeding mileage limits, so compare options carefully before booking.
Fuel prices in Iceland are high, so these Iceland car rental tips can help you keep costs down and stretch your budget further.
✔ Rent a diesel car – Diesel is often cheaper per liter than gasoline and provides better fuel efficiency.
✔ Plan your route efficiently – Minimize unnecessary driving by mapping out your stops in advance.
✔ Use the Gasvaktin app – This handy app helps you find the cheapest fuel prices along your route.
✔ Consider a prepaid fuel card – Some stations offer discounts when using these.
✔ Drive smart – Maintain a steady speed and avoid rapid acceleration or braking to improve fuel efficiency.
✔ Opt for a fuel-efficient car – A smaller vehicle will use less fuel if your trip doesn't require a 4x4.
✔ Split costs with travel buddies – Sharing rental and fuel expenses makes your trip more affordable.
Knowing what to expect when picking up and dropping off your rental makes things a lot smoother. Most rental car companies operate from two main locations: Keflavík International Airport and Reykjavík City. The best choice depends on your itinerary.
✔ Keflavík Airport – The most convenient option if you want to start your road trip right away.
✔ Reykjavík City – Ideal if you're staying in the capital before hitting the road.
✔ At Keflavík Airport – If flying out, drop off luggage and passengers at the terminal first to make things easier.
✔ In Reykjavík – Plan ahead so you're not stuck carrying bags if the rental office is far from your accommodation.
Not sure where to pick up your rental? Here's everything you need to know about choosing between Keflavík International Airport and Reykjavík City. Each has its own advantages depending on your travel plans.
✔ Convenient for immediate road trips – No need for an expensive taxi into the city.
✔ Shuttle services to rental offices – Many rental car companies provide free airport pickups.
✔ Longer operating hours – More flexibility for early morning or late-night arrivals.
✔ Ideal if you're staying in the city first – No need to rent a car before you actually need it.
✔ Rental offices near the harbor – Easy to access if you're exploring Reykjavík before heading out.
✔ Shorter operating hours – Keep this in mind if you need an early pickup.
Both options work well, depending on your plans. If you're heading straight out of town, Keflavík is the better choice. If you're spending a few days in Reykjavík first, picking up your car in the city makes more sense.
Before you hit the road, take a few minutes to check your rental car. A proper inspection can save you from unexpected charges later. Rental car companies expect you to return the car in the same condition, so document anything that looks off.
✔ Look for scratches, dents, or windshield cracks and take photos.
✔ Check that all lights, mirrors, and wipers are working properly.
✔ Inspect the tires for any visible damage. If renting in winter, confirm winter tires are installed.
✔ Test the seat belts, heating, air conditioning, and GPS/audio system to make sure they work.
✔ Ensure the car has all necessary documents, including insurance and registration.
✔ Check fluid levels and look for any leaks.
✔ Take time-stamped photos or videos of any pre-existing damage.
✔ Have the rental company document any issues before you leave.
✔ Familiarize yourself with the car's controls so you're not figuring things out on the road.
Nobody likes surprise fees, so here's how to return your rental car without extra costs. Rental car companies can be strict about returns, so a little preparation goes a long way.
✔ Return on time – Late returns can lead to extra fees, so stick to your agreed drop-off time.
✔ Refuel before returning – Most rental car companies use a full-to-full policy. Keep the receipt as proof.
✔ Check for excessive dirt – If the car is too dirty, you might get charged a cleaning fee. A quick rinse at a self-service station can save you money.
✔ Do a final inspection – Walk around the car and take photos before handing it back to confirm there's no new damage.
✔ Plan your airport drop-off – If returning at Keflavík Airport, drop off luggage and passengers at the terminal first to make things easier.
✔ For Reykjavík returns, plan ahead if your accommodation is far from the rental office.
A 4x4 is recommended for exploring F-roads, highlands, and during winter. For summer trips on main roads, a 2WD is sufficient. Consider your itinerary and season when deciding.
Collision Damage Waiver (CDW) and Third-Party Liability (TPL) are compulsory. Consider additional coverage like Super CDW, Gravel Protection, and Sand and Ash Protection for comprehensive protection.
Watch for airport pickup fees, young driver charges, fuel policies, late return fees, and equipment rental costs. Some companies may charge for additional drivers or have seasonal surcharges.
Keflavík International Airport is the most convenient location for most travelers. It offers 24/7 pickup and drop-off services, allowing you to start your journey immediately upon arrival.
Yes, you can rent a car in Iceland. Various companies offer rentals at airports, in Reykjavík, and other major towns. A valid driver's license is required.
Requirements include a valid driver's license held for at least 12 months, a minimum age of 20 (23 for larger vehicles), and a credit card for the deposit.
Before you hit the road, keep these Iceland car rental tips in mind for a hassle-free trip. Rent a car in Iceland early to secure the best price, especially in peak season. Choose the right vehicle for your route, whether it's a 4x4 for the highlands or a fuel-efficient car for the Ring Road.
Always check for hidden fees, inspect the car before driving off, and get the right insurance to avoid costly surprises. Stick to speed limits, monitor road conditions, and refuel before returning the car. With the right preparation, your Icelandic road trip will be unforgettable.