To make the most of Iceland’s wonders, it’s best to set off on an adventure in your own vehicle: to go off the beaten track, to see the most beautiful roads and to admire the sunrises!
Here’s our practical guide to stress-free car hire in Iceland.
This opinion is completely independent, based on our experiences. We visited the region anonymously, making our own choices and paying our bills in full.
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How to rent a car in Iceland: quick answer
All these answers are more detailed in the article below, but if you just want some quick answers:
- A good idea?
In summer, yes, absolutely. In winter, it depends on your skills. - Where to rent
Keflavik airport (international) - Which car?
4WD highly recommended in winter
Not necessary in summer if you’re on the Ring Road (Route 1)
But necessary, if you intend to explore further and take F-numbered routes. - Best agencies
Iceland has many good local agencies as well as international brands.
Just be aware that some local agencies, which have lower prices, often have older cars.
We love Lava Car Rental.
They have good offers on DiscoverCars, our favorite platform for renting cars and taking out associated insurance (and one of the best-rated).
But you can also check out their offers on the more specialized GuidetoIceland platform.
0 – Should I rent a car in Iceland?
Should I rent a car in summer?
We highly recommend it.
Driving is the best way to explore Iceland, offering unrivalled freedom to admire spectacular nature. This allows you to discover hidden treasures, visit sites before the crowds arrive, at sunrise or sunset, and adapt easily to weather conditions.
Should I rent a car in winter?
Renting a car in Iceland during the winter depends largely on your experience of driving on ice and snow. Although it offers some flexibility, winter driving in Iceland can be challenging due to unpredictable weather, limited daylight and dangerous road conditions. If you know how to drive in winter, a 4WD vehicle with studded tires may be just what you need. Otherwise, guided tours are safer.
1 – Where to rent a car in Iceland
Where to take your car?
You have two main options: the airport or the city of Reykjavik.
Given the price of car rentals and the cab fare between the city and the airport (50-minute drive), we recommend renting your car at the airport.
When to rent a car
If you want the best choice of models and the best prices, we advise you to book as soon as possible.
Our preferred platform
Our first instinct is to check out the offers on DiscoverCars.
This platform allows us to easily compare offers from different rental companies: prices and conditions. And every time, we find good deals. What’s more, the insurance is attractively priced.
Which are the best rental agencies in Iceland?
In Iceland, you’ll find all the international brands: Hertze, Sixt, Alamo…
But you’ll also find many local brands that know the needs of Iceland’s roads. However, you should be aware that some of the lowest-priced suppliers offer older vehicles. It all depends on whether you’re looking for a lower price vs. more assurance that you won’t have any problems with the car.
We like Lava Car Rental and Icerental 4WD.
So far, we’ve had nothing but positive experiences with no problems. When you read the comments online, remember that the millions of people who haven’t had any problems don’t take the time to leave comments…
>> View car rental agencies on Discovercars
>> and other choices on GuidetoIceland
OUR GUIDES TO PLAN YOUR Dream trip
2 – Which rental car for Iceland?
Here are the different car sizes, and when to choose them and when not:
Small cars/economy cars
For example: Toyota Aygo, Toyota Yaris, Hyundai i10, Kia Picanto
Benefits:
- Lower prices
- Sufficient for driving in Reykjavik and on main roads
- More fuel-efficient
Disadvantages:
- Chassis too low for unpaved roads
- Limited luggage space
Medium-sized cars
Examples: Hyundai i20, Hyundai i30, Kia Ceed
Benefits:
- Comfortable for 2 to 5 passengers
- More luggage space
- Very comfortable for main roads and some wilder roads
- Less expensive than 4WDs
Disadvantages:
- No access to F roads (4WD only)
- More expensive than small cars
4×4
Examples: Dacia Duster, Suzuki Jimny (small 4WD), Land Cruiser, Mitsubishi Pajero (large SUV)
Benefits:
- Don’t worry as soon as you see a road that interests you. Ideal for adventure
- Feeling more adventurous in a wild landscape
- Giving access to F roads. However, small SUVs like the Suzuki Jimny are not enough for very large F roads with rivers to cross (like Landmannalaugar or Thorsmork).
- Best for winter driving conditions
Disadvantages:
- More expensive
- Less fuel-efficient
Key factors in making your choice:
- Your itinerary: Main or secondary roads or route F
- Travel season: Summer and winter driving conditions
- Number of passengers and baggage
- Budget considerations (rental costs and fuel consumption)
- Car availability…
November is a pivotal month, and it’s hard to predict what conditions will be like.
Rent a camper van or motorhome
You can also choose to rent a vehicle and use it as accommodation.
In summer, you can rent van-campers and motorhomes. It’s a great way to be even more surrounded by nature.
However, you should be aware that wild camping (except for long hikes) is not permitted in Iceland.
3 – How to rent a car cheap in Iceland, how to save money
If keeping costs down is your main concern when it comes to renting your car in Iceland, you need to:
- Book early
- Travel outside the main seasons – for example, rates in April and November are more attractive.
- Putting the car back where you found it
- Reserve a smaller car
- Pay attention to pick-up and drop-off times – Car rental is usually charged in 24-hour periods
- Choose a rental with no cancellation or with limited cancellation
- Book with limited mileage
- Book with agencies that carry older models
However, read the fine print.
WHERE TO STAY IN Iceland
Our independent picks for the accommodation of your dreams:
- Where to stay in Iceland (coming soon)
- Where to sleep in Reykjavik (coming soon)
- Best 5-star hotels (coming soon)
- Where to sleep on the South Coast (coming soon)
- Where to sleep on the Golden Circle (coming soon)
- Where to sleep on the Snaefellsnes peninsula
4 – Permits, rules and credit cards
Minimum age
The official driving age in Iceland is 17.
However, most car rental companies in Iceland will ask you to do so:
- be over 20 or 21 years of age
- have held a driving licence for one year or more,
- pay an additional fee if you are under 25.
Do I need an international permit to rent a car in Iceland?
To be allowed to drive in Iceland (for a short stay), you can use your country’s driver’s license if:
- it has a license number,
- he has a photograph,
- it has a validity date,
- it is written in Latin letters,
European, American, Canadian, Australian countries… all work.
Otherwise, you need an international permit.
Do I need a credit card?
The answer may be.
When you rent a car without taking the 0 deductible from the rental company, they systematically take a deposit with your credit card (a sum is blocked on your account to be debited in the event of an accident). Some rental companies refuse to accept debit cards.
If you rent directly from the rental company and take out their insurance, which sets the deductible at zero, you don’t need a credit card.
5 – Taking out insurance
Compulsory insurance
Unlimited liability insurance is compulsory in Iceland. It is automatically included in the price of all car rentals.
Supplements
If you’re planning to take unpaved roads, we strongly advise you to take out additional protection that reduces the amount you have to pay in the event of an accident.
3 main options:
Option 1
Your personal car or home insurance covers car rentals (but read the fine print, it’s rare).
Option 2
Take out insurance on the rental platform.
Advantage: best price
Disadvantage: you’ll have to leave the security deposit (sum blocked on account) when you pick up the car, and you’ll have to advance the sum and send in the paperwork to be reimbursed. We’ve already used DiscoverCars insurance twice with no worries. Refunds were very quick.
Option 3
Take the complementary car rental. It’s more expensive, but you won’t have to pay anything up front and you won’t have to do any paperwork in the event of damage.
Notes specific to Iceland
Please note that many insurers do not cover damage to windows and windscreens, which are most at risk in Iceland (read everything carefully).
Some companies also offer insurance against damage caused by volcanic ash. See risk tolerance level. We haven’t taken them yet.
6 – Access the rental cars and check your vehicle
Recover the keys
At Keflavik airport, car rentals are easy to find.
The airport is not large, so you won’t have to walk for miles.
On the other hand, only the major brands have offices at the airport.
For other brands, you’ll have either shuttles or a car delivery service.
Check the car when you receive it and when you return it.
If you’ve taken the rental company’s complementary service to set the excess to zero, there’s no need to check the condition of the car, but make sure you have all the essential equipment.
Otherwise, we recommend that you walk around the car, take photos of any damage and inform the agency if it is not noted in the car pick-up document.
Pay attention:
- all over the car’s exterior to detect dents and scratches.
- on the roof – It’s often forgotten, but it may be checked on your return.
- below the bumpers
- rearview mirrors
- inside
- tire condition
- the condition of the wing (mud wing above the wheels)
- spare wheel (if applicable, as fewer and fewer cars have a spare wheel)
- fuel level and mileage, that they correspond to the file
In Iceland, the following equipment must be available in the car:
- Warning triangle (mandatory)
- Reflective vest or jacket (recommended)
7 – Getting ready to drive in Iceland
Frankly, driving in Iceland in summer is very easy, except when it’s very windy. The main roads are in good condition.
In winter, with snow and ice, you need to know how to drive safely. If you don’t know how to behave in the event of a skid, get some training or join an organized tour.
Here are the general rules for driving in Iceland:
- Right-hand drive
- Seat belts are mandatory for driver and passengers
- Headlights must be on at all times
- BAC limit = 0
- National speed limits are – 50km/h in residential areas, 80km/h on gravel roads and 90km/h on major paved roads such as Route 1.
- Fill up when you can – some areas are sparsely populated, so plan ahead.
Find out more in our articles:
- Driving in Iceland (coming soon)
- Driving in winter in Iceland (coming soon)
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Our experiences and what we wish we had known
Frankly, so far, our car rentals have always gone very well. No problems to report.
The people were charming, the processes smooth.
The cars were in good condition. We mainly rent 4WDs, so we can explore as much as possible for you.
Fuel discount
Some car rental agencies offer fuel discount cards. Check with your rental agency to see if you are eligible, and save money!
Watch out for sheep and reindeer
In summer, sheepsheads can sometimes travel across roads. And in winter, reindeer descend into the eastern fjords and also like to cross the road without warning.
Stay vigilant!
What to do if you have damaged the car
If your rental car is damaged, the first thing to do is to contact the car rental agency.
- If your rental car only has basic insurance, you’ll need to cover damage up to your deductible.
- If you have full coverage with the rental agency, check with them and the damage should be covered.
- If you have purchased with a platform, contact them and provide all the information (within 7 days of filing the claim). They will reimburse you for the costs of the damage, if justified.
- If you use your own insurance, contact them and provide all information. They will reimburse you for the fees and costs associated with the damage, if they are justified.
What to do in the event of an accident
112 is the emergency number.
Frequently asked questions
Car rental scams in Iceland
To our knowledge, there are no specific scams in Iceland.
As in most countries, if the price is very, very low, there must be conditions and tricks behind it.
How much does a car rental in Iceland cost?
Your rental price varies from 50 to 300 EUR per day.
Prices depend on:
- car type,
- reservation period,
- rental period,
- time,
- additional insurance…
Rules for child safety seats in Iceland
To comply with Icelandic legislation :
- children under 12 or shorter than 1.35 m (4’4″) must use a special seat – various requirements apply depending on size/age.
- Children under 150 cm (4’9″) are not allowed to sit on the front seat in front of an activated airbag.
- see safety rules for children in Iceland
PLAN YOUR TRIP AROUND iceland
- Best of
Things to do in Iceland (coming soon)
Most beautiful waterfalls (coming soon)
Most beautiful black sand beaches (coming soon)
Best excursions from Reykjavik (coming soon)
Best things to do in Iceland in winter
Winter ice caves (coming soon)
- Practical advice
Getting around (coming soon)
How to rent a car in Iceland (coming soon)
Driving tips (coming soon)
Itineraries (coming soon)
Where to stay in Iceland (coming soon)
Itineraries: 3 days – 4 days – 5 days – 1 week – 10 days (to come)
- The must-dos
Things to do in Reykjavik (coming soon)
Best attractions in the Golden Circle (coming soon)
South Coast attractions (coming soon)
Snaefellsnes Peninsula (coming soon)
Silver Circle (coming soon)
Lake Myvatn attractions (coming soon)
Jokulsarlon (coming soon)
