Renting A Car In Iceland: Complete Guide

Planning to visit Iceland? Renting a car in Iceland is the perfect way to explore all it has to offer. But where do you start?

In this Iceland car hire guide, we’ll take you through everything you need to know, from choosing the right car for your needs to navigating Icelandic roads and everything in between.

Is renting a car in Iceland a good idea?

Thinking of renting a car for your Icelandic adventure but not sure if it’s worth it? We’re here to tell you that car hire in Iceland is an excellent idea for several reasons.

It’s better than buses.

Believe me, you don’t want to waste a single moment of your Iceland adventure waiting for buses to pick you up for a short ride.

Buses can be rare, especially outside of the summer months, and relying on them may limit the number of places you get to see.

While bus tours are a popular way to see Iceland, they can be limiting in terms of where you can go and how long you can stay.

By renting a car in Iceland, you’re free to create your own adventure and can spend as much time as you want at each location without being rushed back to a tour bus.

You can visit more places.

Do you know that there are parts of Iceland that can only be reached by car? That’s right! To fully explore the wonders of Iceland, renting a car is pretty much essential.

With your own set of wheels, you’ll have the freedom and flexibility to stop anywhere. And the best part is, you can stop and take in the stunning scenery whenever you want (just remember to stay on the roads!).

So why limit yourself to the typical tourist spots when you can go beyond and see Iceland like a true adventurer?

Iceland mountain scenery.

You don’t have to spend money on hotels.

Are you a budget-conscious traveler? Here’s a tip for you: pack a sleeping bag and tent for your Icelandic adventure!

Camping in Iceland can be a fun and budget-friendly way to experience the country. Just make sure you come prepared with warm clothes, a good quality tent, and plenty of food and water.

With the right gear and mindset, camping in Iceland can be an unforgettable experience that won’t break the bank.

You can split the cost.

Let’s be real: car rental fees in Iceland can be a bit more expensive than you used to in Europe, but don’t let that put a damper on your plans!

Here’s a pro tip for solo travelers or anyone looking to save some money: join travel forums or groups and find others to split the cost of a rental car with. Not only will you save money, but you’ll also have a group of travel buddies to explore Iceland with!

Which car rental company should I choose in Iceland?

Choosing a car rental company in Iceland can be overwhelming with so many options available. But fear not, I have a helpful tool to share with you.

On my visit to Iceland, I used Discover Cars. This tool lets you compare the prices of different car rental providers in Iceland, so you can find the best deal for your needs.

With many search options available, you can easily adjust them to suit your budget, preferences, and travel plans.

What are the car rental prices in Iceland?

Let’s talk about the numbers, shall we? The cost of car rental in Iceland depends on a few factors, such as the type of car you choose, the rental company, and the duration of the rental.

Generally, the cheapest cars available are small hatchbacks, like from Hyundai or Kia, which can start at around €80 per day.

If you’re looking for a 4-wheel drive option, the price will be a bit higher, with the smallest 4WD ranging from €120 to €200 per day and larger vehicles costing between $160 and $400 daily.

Keep in mind that prices can vary depending on the rental company, time of year, and any additional insurance you choose to add. So be sure to shop around and compare prices to find the best deal for you – a great tool to use is Discover Cars.

And remember, the cost of the rental is an investment in your Iceland adventure, so it’s worth spending a little extra for the freedom and flexibility of your own wheels.

Tips: There’s usually a discount if you rent for more than a week. Also, you can find better daily rates and deals during the off-season from September to May.

renting a car in Iceland.

What is the best car to rent in Iceland?

When choosing a car to rent in Iceland, it’s important to think about your travel plan, the time of year, and your experience when it comes to driving in less ideal conditions.

If you’re just visiting the Southern parts of Iceland, or sticking to around Reykjavik and the Ring Road, a less-expensive hatchback car may be all you need, which is nice for budget travelers.

However, during the winter months, you may feel safer in a larger 4WD if you’re not used to slippery roads.

If you plan to explore the highlands, such as the Northern regions or even the F-roads, a 4-wheel-drive vehicle is a must-have.

These F-roads are mountain or highland roads that are not regularly snow-ploughed, and you can’t drive on them without a 4WD. Some F-roads will even require more specialized SUVs. The mountain roads’ conditions are regularly updated here.

Overall, a hatchback car will still let you see a lot of this amazing island, but don’t expect to drive into the mountainous regions of the North – and you might find it a little tricky during the winter months.

Should I rent a car in the winter?

If you’re planning a winter trip to Iceland, please be aware that renting a car may not be the best option if you’re not used to driving in snowy and icy conditions. It can be dangerous, especially if you’re not familiar with these road conditions.

Additionally, some roads in Northern Iceland can be closed for days during the winter due to snowstorms and other extreme weather conditions.

It’s always a good idea to check road and weather conditions before going on your trip

driving in Iceland guide.

Should I rent a campervan?

Thinking about renting a campervan for your Iceland adventure? It could be a great option if you’re looking to save on hotel costs and want the convenience of having everything you need in one vehicle.

Prices for camper-van rentals are around €110 to €160 per day.

Should I have a GPS?

For navigating the Icelandic roads, a GPS device might be a good idea. Most car rental services offer GPS options for around €8 per day. These devices will have a better connection than your phone, and let you save your phone’s battery in case of emergencies.

But if you’re looking to save some money, using Google Maps is also an option. Just be sure to download offline maps before you hit the road.

It’s always a good idea to pick up a local SIM card, and maybe even pack some extra batteries for your devices to stay connected while you’re out exploring.

Tips for renting a car in Iceland

While you’re booking your rental car in Iceland, here are some things to keep in mind:

Watch out for hidden costs

Make sure to check the fine print before renting a car. Some car rental companies may add on extra charges, like insurance, airport pickup fees, or one-way rental fees.

Book early for better deals

It’s a good idea to book your rental car in advance, especially during the high season when demand is high. You’ll have more options and may even be able to snag a discount.

car window Iceland.

Know your insurance options

Most rental car services include Collision Damage Waiver insurance, which covers most damage to your vehicle in case of an accident. However, the amount of coverage can vary, so it’s important to double-check with the rental company.

Theft protection is usually included in the insurance, and although theft is rare in Iceland, it’s good to have that extra peace of mind.

What is the Iceland car rental age?

To rent a car in Iceland, you must be at least 20 years old. If you plan to rent a more powerful car or a 4-wheel drive, you’ll need to be at least 23.

If you’re under 25 years old, some rental car companies may charge you a young driver fee. This extra charge is between €5-€10 a day.

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’ll need to get an International Driving Permit before your trip. The good news though is this is quite cheap and easy.

Overall, you’ll need:

  • A driving license from your home country.
  • Your ID (passport).
  • Credit card, debit card, or PayPal for payment when booking the car online.
  • A credit card in your name (not a debit card) for paying the deposit on arrival.

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 camper vans for rent via Airbnb.

If you decide to do this, check the costs and small print carefully. During my trip, I found the prices weren’t much lower than car-hire companies – and you may not have the correct insurance if things go wrong. Always double-check.

What is it like to drive in Iceland?

Have you ever driven in Iceland before? If you’re curious about what it’s like, I actually wrote a complete guide about driving in Iceland! You can check it out if you want to learn more.

Are you planning a trip to Iceland?

And if you’re planning a trip to Iceland, I’ve got you covered. I have tons of free resources available on Iceland travel, including articles on money-saving tips, the best time to visit, and the best things to do.

Check them out below!

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  1. I am just back from a 3 week trip to Iceland where we rented a car. I wish I had found this post before I traveled to Iceland as it answers all the questions one might have about renting a car. I agree that in summer and as long as you stick mostly to the ring road (we traveled the West Fjords also) you will not need a 4×4. And not all roads are paved.

  2. Blair Villanueva says:

    Whenever we travel overseas, we always prefer renting a car (I got a membership with Avis), and I agree with you, it is much convenient to use than taking public transport. And I don’t have to worry about time, coz we manage it. I’m taking note of your recommendation, coz we definitely need this when we visit Iceland!

  3. Sherianne says:

    I visited during the winter and felt unsure of driving myself so I took day tours. It did start to storm during one of the day trips and it was obvious our driver was having trouble so I can assume I would have been in a panic. I agree, going it alone allows for so much more flexibility and is the best summer option. Good to know a 4 wheel drive is needed for F-roads.

  4. Linda Holland says:

    We would definitely want to rent a car if we visited Iceland so good to read this guide for a few tips. We would definitely opt for a 4 wheel drive to let us explore at will. I did not know that there were roads that you could not drive on without one. As Canadians, we would probably be ok even driving in the winter.

  5. Puloma Banerjee says:

    That was a detailed post on renting a car in Iceland!I didn’t know rental insurance was so expensive in Iceland and definitely renting from locals is a good idea.Best thing would be to go for an international driver’s lice.

  6. Trisha Velarmino says:

    If I do get the chance to visit Iceland, I will follow your advice to enjoy and experience it using a car. Thanks for the pro tips and for putting this information together. With a view and sceneries like these on the photos, renting a car will give that flexibility and convenience indeed.

  7. I totally agree with the fact, that you should get a car if you visit Iceland. If you want to see this beautiful island, and all the natural wonders there, it is the easiest way. Also, going on organised tours is very expensive there. This was a great guide to anyone visiting Iceland.

  8. Happy to know that it is possible to rent a car in Iceland. With the scenic view, a road trip is a great way to enjoy it. Thank you for sharing this. Will surely consider driving on our own should we get a chance to visit.

  9. Medha verma says:

    Love your detailed post and I couldn’t agree more- driving is the best way to explore Iceland. In fact, we rented a campervan too when we were there in 2019 autumn, and it was the best experience of my life. It’s a little pricey of course but like you said, you end up saving the cost of staying in a hotel. Plus the adventure quotient is high!

  10. I like how you mentioned that it is important to consider how long you will use the car. My cousin mentioned to me last night that he is looking for a car for hire for their family gathering next week and asked if I have any idea what is the best option to do. Thanks to this informative article and I’ll be sure to tell him that they can consult a well-known car for hire service as they can answer all their inquiries.

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