Skip to Content

The Best Iceland Car Rental: A Complete Guide

You have almost done your preparations for your Iceland holiday! There is only one thing left on the list: Iceland car rental.

The success of your holiday depends on this little thing: renting the perfect vehicle! Iceland is a very popular destination so book in advance in order to get a good price and a good vehicle!

For me renting a vehicle was the hardest thing when planning a vacation! I never knew what type of vehicle I should choose or if I really need a vehicle.

In order to make it easier for you, let me tell you why you should rent a car in Iceland, how to choose the perfect auto and what type of insurance you need for your rented car.

Some of the following links are affiliate links. When you buy something using the retail links in our article, we may earn a small commission at no additional cost for you. You can read our full disclosure disclaimer and privacy policy.

Why you should rent a car IN ICELAND

Iceland is one of the most beautiful countries in the world. But to see its wonders you need to travel along the island. These natural beauties are not gathered in one place.

You need to be on a constant move to see what this country has to offer. Geysers, hot springs, waterfalls, and volcanoes are just some of the things which could be seen around Iceland.

Iceland Car Rental ultimate guide
Car Rental Iceland ultimate guide

You get a good taste of Iceland by travelling around the Ring Road and Golden Circle. And which is the most simple, comfortable and easiest way to do that? By car, obviously!

Iceland car rental offers you the freedom, comfort and the unique chance of discovering new places!

  Renting a vehicle in Iceland is the best way to drive the Ring Road, Icelandic most famous road which circles around the whole island.

From north to south, and from west to east, the Ring Road passes through most important Iceland spots.

Akureyri, Vik, Hofn, Skogafoss, Gullfoss, Myvatn are just some of the most important spots you see along the Ring Road.

Iceland Skogafoss Waterfall
Iceland Skogafoss Waterfall

In Iceland, everybody has a car. I don’t think there are buses or train to go from one point to another. You can travel for miles without seeing a house or a human.

Iceland Gullfoss Waterfall autumn
Iceland Gullfoss Waterfall autumn

Actually, cars are the only way to explore the country! And renting a car in Iceland is not that expensive! You can find really good deals if you book in advance!

Have a unique experience by exploring the area in your own rented car

Whether you prefer day trips from your hotel or a tour around the country, car rental is the best way for creating your own experience and live your dream vacation

Booking an individual tour with a guide is much more expensive and does not worth the money because Iceland is a very safe and secure country!

Tour groups are cheaper than individual tours but are still expensive and if you travel with groups you lose your freedom of stopping whenever you want and designing your own itinerary!

Do I need to book in advance?

Iceland car rental is a very hot topic! Everybody who goes to Iceland rent a car for their trip! So, if you plan to visit Iceland in high season book in advance if you want to get a car!

Although the number of vehicles to rent is pretty high in summer the companies might be out of stock!

If you already have booked your holiday to Iceland and want to rent a car, don’t wait too long because you might run out of the car.

Where to hire a car in Iceland

Iceland is a very developed country from a technology perspective. Everybody has access to technology and everything is happening online.

The best way to get a car on this island is by renting the car online.

Blue Car Renal Iceland Dacia Duster rent a car
Iceland Car Renal Dacia Duster rent a car

There are many online sites which offer to rent all kind of cars.

Some car hire companies present the offers very clear and others try to impress with their low prices.

Renting cars directly from the desk is not a very popular practice in Iceland. You might have bad luck and not to find any available car.

That is why you should book online and in advance. Just to be sure you will get what you want.

  My Iceland car rental process ended with a vehicle rented from

Everything went smooth and easy, we could compare the prices very easy and we know what we bought.

We had plenty of rental companies to choose from and many vehicle models, too. I must say, it was very easy for us to decide what we buy.

Get the best price for your car rental today

What car to rent for your Iceland holiday

1. 4WD or 2 WD?

Let’s start with the beginning! In which season you visit Iceland? In summer, in winter, in spring or in autumn? Summer is the easy way!

The roads are clean, there is no snow on the roads and all roads are open 24/7. There are many hours of light so there should not be any issues. I don’t think you would need a 4×4.

A regular car would be enough!

The only problem in summer is the increased number of tourists and the limit offer of Iceland car rental offer.

In winter is more exciting to rent a car! First of all, be careful about what tires you have! It should have winter tires or better-studded tires!

Because the roads are very difficult! A 4×4 vehicle is recommended but does not change much the situation. If you have ice on the road then no 4×4 would help you. The tires type is more important!

For your own comfort you can rent a 4×4 car in Iceland but better watch twice at the tires!

The road conditions are pretty difficult, the daylight lasts just a few hours and if you are lucky enough there might be closed roads because of ice, snow, and wind. So be prepared for all these inconvenient!

Blue Car Renal Keflavik Dacia Duster rent a car
Blue Car Rental Keflavik Dacia Duster rent a car

Autumn and spring are the most indicated periods to rent a car! The number of tourists is reasonable, the day is long enough and the weather is still friendly!

We chose to travel to Iceland in early October!

We had all the four seasons in this trip! We constantly were watching after the road conditions on a specialized website and on the weather.

We rented a 4×4 but this does not help us a lot because it was with all season’s tires and in the icy road this does not help us a lot.

But overall, we enjoyed our trip without any unpleasant surprises. Iceland car rental is a tough business and everybody tries to get some money out of it.

Be careful in the car you get! I If you travel in winter and late autumn check the car to have ice squeegee and row for snow.

If it doesn’t have all these things I would recommend you to get ones. Better safe than sorry!

We need an ice squeegee and we don’t have it so we were forced to improvise!

F roads and rented cars

Iceland has a special category of roads. They are called F roads. These are the roads that access the highlands in Iceland. Normally all renting companies advise you to avoid these roads.

They are open just in certain periods of the year and sometimes just on the day time.

You need a 4×4 to drive them because F roads are not for everybody.

  Drivers with experience car drive on these roads. You’d better avoid them and stick to the classical Ring Road. It is safer and less risky! The view is incredible! You don’t need to adventure on such difficult roads!

2. Small car, normal car vs van

If you plan to make short trips from Reykjavik then renting a small car in Iceland would be enough for you.

A small car with a small consumption to take you from your hotel to your day trip is exactly what you need.

The car is ideal for Golden Circle tour, Blue Lagoon trip and other locations close to Reykjavik. The price per day for small cars is between 50 to 100 euros.

Are you interested in doing the Ring Road, stick to the asphalt road and sleep in hotels?

Then a normal car size is what you need. It should be a 2W drive, comfortable and safe for your tour around Iceland.

The price for normal size cars is between 70- 150 euros per day. Iceland car rental offers you 4W drive cars to increase your safety feeling but you would not need it for Ring Road, no matter on what season you travel.

There is always the option of renting a van in Iceland. You sleep, drive and spend your night in the same van but in different places of Iceland.

I must say this is one of the smartest solutions if you travel on a budget! The prices of the vans are even higher!

Vans could cost somewhere between 100 to 400 euros per day depending on what are you looking for.

A motorhome with a toilet, shower, and everything is the most expensive, but still, it is cheaper than a room in a hotel!

Check here the prices for your trip for the vehicle that best suits your needs!

Get the best price for your car rental today

What to look when renting a car in ICELAND

After you have decided what kind of car you need, you have to move forward on the renting process. It is not a complicated thing, but you need to be careful about some small details.

  • Check the price and the price component line by line. Why? Just to be sure that you compare the same things. Some companies don’t include in the price everything and others do. Comparing two different things might lead you to a wrong decision.
  • If it is too cheap then it must be something fishy! Don’t let yourself be fooled and double-check the market prices and what is included and what not!
  • Check to see the kilometers policy of the company. There are only two options: with limited mileage and unlimited mileage. The ones with limited mileage are usually cheaper but in the end, if you overcome the imposed limit you will pay much more. Unlimited mileage is the best choice when speaking about Iceland car rental.
  • Read carefully all the terms and conditions of the car hire company and follow the set of rules imposed. In general, the terms and conditions are the same to all companies but small differences might occur. See which are these small differences and get acquainted of them. The amounts to be paid if you are breaking the rules are very high. Actually, in Iceland, everything is very expensive! So, you would better avoid these unexpected outflows of money.
  • At pick up and drop off inspect very well your car and write down all the scratches and signs from the car. Make photos from all angles, all over the car!
  • Pick up and drop off the car during the operating hours of the car rental Iceland companies. Inspect the car with an employee and make a copy after all the documents you sign.
  • Look what is included and what is not included in your insurance bought together with the car rented. Many companies sell insurance which does not cover against damages caused by gravel roads, ash, sand, ice, theft, etc.

Iceland car rental extra insurance

Although the insurance policy bought when you rent the car is called full coverage insurance this does not include gravel road insurance, sand and ash insurance or ice and ash insurance.

This means that if you have an incident, a scratch because of sand and ash storm or gravel road damage the car you are not covered and you have to pay the repairs from your pocket.

Some normal car insurance policies included in the car rental fee have pretty high self- reliability.

  This self- reliabilities are called deductibles and represent the amounts which are to be paid by you if an incident happens. The deductibles are pretty substantial in Iceland.

We are talking about important amounts, somewhere around 1.000 euros per event, which for me is an important amount. Paying such deductible might mean the end of my trip!

That is why I always choose third party insurance. I like to travel with no stress and to have everything covered!

  You pay the extra money, in addition, the rental fee already paid but the amount paid is insignificant in comparison to the deductibles you have to pay if something happens to your car and you are not covered!

Best 5 reasons to rent a car in Iceland for your trip
Iceland road

Ash and sand storms are pretty normal in Iceland and gravel roads are everywhere. So it is a matter of luck and timing to have damage to the rented car.

I am not willing to take such risks so I always buy extra insurance!

Have you already hired your car for Iceland?

Do you like to travel without any worries that a car accident might ruin your holiday? Stay on the safe side and buy extra insurance for your car rental!

Do you see?! Iceland car rental is not a difficult process! Actually it is the best option to explore the country!

Not even for I minute I did not regret renting a car and driving along the Ring Road! It was one of the best trips I have ever head!

Here are more articles on the same subject: