So many questions, I know. I also had to do some homework before renting our car, so I know your pain. We rented a car on our trip and visited many places along Iceland’s ring road. We love it!
In this travel guide, I will share tips and useful information to answer all your questions.
Is renting a car in Iceland a good idea?
Traveling by car is the best way to explore Iceland. Here is why.
It’s better than buses.
Believe me. You don’t want to wait for buses to come and pick you up just for a short ride. Buses are pretty rare and run mainly in the summer.
Also, while the bus tours in Iceland are pretty good, surely the experience is not as good as driving on your own.
You don’t have to wait for other travelers on tour, and you can decide how much time you want to spend at each place without being rushed back to the bus.
You can visit more places.
Do you know that some parts of Iceland can only reach by car? Yes, it’s true.
You’ll have so much freedom and flexibility when driving a car. You can stop anywhere (except the off-roads) and enjoy the scenery.
You don’t have to spend money on hotels.
If you’re a budget traveler, pack a sleeping bag and a tent with you on your trip. Camping in Iceland is fun if you’re well-prepared.
You can split the cost.
Although the car rental fee in Iceland is much more expensive than in other countries, it’s not that bad if you can split the cost with other travelers.
If you travel solo to Iceland, you can visit the forums or travel groups and find a few people to rent a car together.
Which car rental company should I choose in Iceland?
Iceland has so many car rental companies, and I was honestly overwhelmed when I first looked at them.
I use Discover Cars to compare the prices and services of different car providers. There are many filter options to choose from, so you can adjust them according to your needs.
Car rental prices
The cheapest cars are usually small hatchbacks or similar ones. For example, the rental price for a mini Hyundai or Kia starts at $80 per day.
For the smallest four-wheel drive (4WD), the fee is from $120 to $200, and the larger 4WD costs between $160 and $400 daily.
- The rental rate includes unlimited mileage, 24% VAT, and a collision damage waiver (CDW).
- The company may charge a certain fee if you drop your car at a different location from the pick-up.
- There’s usually a discount if you rent for more than a week. Also, you can find better daily rates and deals from September to May when there’s a low number of tourists.
What is the best car to rent in Iceland?
You should pick a vehicle that suits your travel plan and the time of the year.
For example, it depends on the roads you intend to drive, the number of people, and the space you need.
Time of the year
A larger car is better and safer if you visit Iceland in the winter. A four-wheel drive (4WD) is essential in slippery winter road conditions and deep snow.
Where you go
If you visit the Southern parts or around Reykjavik and the Ring Road, you won’t need a 4WD.
However, if you plan to visit highlands such as the Northern regions or F-roads, you’ll surely need a 4WD vehicle.
You should check the mountain roads’ condition and opening before going.
In brief, you can’t drive on F-roads without a 4WD. F-roads are mountain or highland roads that are not regularly maintained. Some F-roads will need a big SUV or even specialized vehicles.
If you travel to Iceland on a budget, hatchback cars would be perfect.
There’s a wide range of budget cars you can choose from, but you should select a medium vehicle to be more comfortable.
Should I rent a car in the winter?
Renting a car in Iceland in the winter is not a good idea unless you have experience driving in snow and ice.
Also, please note that some roads in Iceland in the winter are closed for days due to snowstorms and harsh environments.
Should I rent a campervan?
A campervan is fantastic to travel in general but renting one or not depends on your budget.
A campervan costs from $110 to $160 per day, but you can save the hotel cost. And it’s much more convenient than a car.
Should I have a GPS?
GPS is generally good to have, as navigating can be confusing. Most rental car services will have options for opt-in GPS at around $8 per day.
However, you can save the cost by using Google Maps. Don’t forget to download offline Google maps before you go. You also should get a local SIM card and pack extra batteries for your road trip.
Tips for renting a car in Iceland
Check small prints for hidden cost
Before renting a car, you should check the small print to see if there’re extra costs such as insurance, airport pick-up charges, and one-way rental fees.
Book your car. The sooner, the better.
Don’t wait until the last minute to book your car. In high season, the demand rises, and there are not enough good cars for people to rent. It leads to higher car rental prices.
You’ll have more choices when booking your car early and maybe even a discount.
Rental car insurance
Collision Damage Waiver
Most car rental services include a Collision Damage Waiver, which covers most of the damage to your vehicle, for example, in case of an accident.
This amount can vary between car rentals and is usually around 2.000 EUR.
The insurance covers damages to all car windows, including cost of installation or repair if that is possible.
It’s perfectly safe in Iceland, and the theft rate is really low.
However, if your rental car is stolen, the most you’ll pay towards replacement costs covered by the policy is the theft excess.
What is the Iceland car rental age?
To rent a car in Iceland, you must be at least 20 or 23 years old if you plan to rent a 4WD. Also, you need to have a valid driving license.
If you’re under 25 years old, some rental car companies may charge you a young driver fee. The surcharge is between $5-$10 a day for a maximum of 7 days.
Can I use my national driving license in Iceland? Do I need an International driving license?
You can drive in Iceland with a driving license from most European countries, the US, Canada, Australia, and New Zealand.
However, if your license is not in Roman script, you must get an International Driving Permit before your trip.
You can request your home country’s automobile association for this permit.
Rent cars from the locals in Iceland
There are a few car-sharing platforms in Iceland, such as CarRenters, where you can rent privately owned cars from locals. You can also find cars and campervans for rent via Airbnb.
If you decide to do this, carefully check the costs and small print. I find the prices are not much different from those of car-hire companies, and you may not have the company’s support if things go wrong.
What is it like to drive in Iceland?
I’ve written a complete guide about driving in Iceland. You can check it out to know more.
Also, check out this video below for safety tips!
Are you planning a trip to Iceland?
I have tons of free resources on Iceland travel and how to make the best of your trip. Check out some articles below: