Renting a Car in Iceland – All You Need to Know

Renting a vehicle on Iceland is one of the best activities possible in this country where. In addition to primary tourist attractions, there are hundreds of places worth exploring.

We travel to this island annually, as part of our Iceland photographic tours, and we always rent a vehicle to have full independence to experience the best locations in Iceland at our group’s pace. Additionally, we have journeyed many times independently and I can recommend when it’s worthwhile hiring a 4×4 automobile in Iceland, where to rent one, how to find inexpensive rental cars in Iceland, and much more.

Briefly, this guide will demonstrate everything you need to know to rent a vehicle on Iceland, from the best automobile that you can rent according to your travel style to the best car rental companies in Iceland and views, among other things. So you only have to worry about making the most of your trip.

Besides, I recommend you to check our guide on how to drive in Iceland, where you will find some useful tips.

Use this index to browse the most complete guide to rent a car in Iceland that covers:

• Best car to rent on Iceland
• Best car rentals on Iceland
• Cheap rental car in Iceland
• Rent a car in Iceland airport
• Rent a car in Reykjavík
• Car rental insurance in Iceland
• License to rent a car in Iceland
• Iceland car rental age
• Tips for hiring a car in Iceland
• Car rental review in Iceland

Best car to rent on Iceland

If you aim to temporarily obtain use of a motor vehicle in Iceland to personally guide sightseeing throughout the nation, the initial piece of information needed recognizes that you can pick between several types of conveyances. The most suitable choice will consistently be a 4WD auto since it permits traveling on any style of terrain. Yet, in some instances, such as if you are solely intending to circumnavigate the Iceland Golden Circle during the summer, you have other less costly alternatives.

To help you choose the best rental vehicle for your trip, I will explain the differing options and the kinds of excursions they are well-suited for.

Manual vs Automatic rental car in Iceland

Initially, you ought to recognize that you can come across both automatic and manual vehicles in Iceland. Automated cars are consistently a bit pricier, so if you want to obtain an affordable rental automobile in Iceland and you feel at ease driving manual cars, this will be the best choice. In case you favor an automatic car, you won’t encounter any trouble obtaining one if you hire with one of the largest vehicle rental companies in Iceland, which we’ll examine later.

2wd car, the best car hire on Iceland to drive the Ring Road

If your trip solely includes locations directly alongside Iceland’s Ring Roador exclusively along paved avenues, renting a standard passenger car or 2WD vehicle will suffice.

This kind of vehicle, other than being the most commonly selected Iceland rental car by visitors, will take you any place you need without hassle. Nevertheless, in winter a 4×4 Iceland car rental is preferred since it’s highly probable that you will encounter ice on the road, which can be dangerous.

If you select a 2WD, I recommend opting for an SUV, because even though it isn`t an off-road car, it provides better maneuverability on tough terrain in addition to being somewhat more sturdy than regular sedans. It’s a great choice if you want to rent a vehicle in Iceland to travel the Ring Road or the Golden Circle while occasionally taking a detour to explore a little further.

4×4, the best type of car to rent in Iceland to explore the Highlands

If exploring the inland Highlands region of Iceland is part of your travel plans, it will be necessary to rent a vehicle with four-wheel drive capabilities. In this mountainous area, roads referred to as F-roads will need to be navigated. Most are unpaved and to safely traverseIceland`s Highlands region, selecting a rental that has four-wheel drive is recommended. Planning to explore the Highlands? Don`t put yourself or a standard rental car you`ll later have to pay for at risk.Savings on vehicle rentals in Iceland can be had by choosing one with four-wheel drive.

Remember that if you visit the highlands, you will often need to drive through rivers. To do so requires using a 4×4 vehicle, although you should be aware that no insurer will cover any issues that come up when crossing streams in Iceland in this manner. Therefore, anytime you choose to drive through a river, you do so at your own risk. The abilities of different 4×4 cars available for rental in Iceland may vary. In other words, only because a vehicle is a 4×4 does not mean it can safely pass any body of water in Iceland. If there is doubt about your car`s river-fording capabilities, it is wiser to turn back and seek alternate routes rather than chance sinking the automobile mid-river or being pulled away by the current.

If traveling to the island between October and April, even without plans to drive F-roads, it is prudent to rent a 4×4 in Iceland. If snow or ice covers roads, this type of vehicle enhances safety.

Economy, the cheapest car rental on Iceland

If you are searching for an affordable car rental in Iceland, the best approach you can take is selecting one that is compact. This works well if you don’t transport too much baggage and you will travel only paved roads in the summer season. Certainly, the most cost-effective option to save some money in Iceland is renting a car that’s small.

These kinds of automobiles aren’t well-suited for operating on secondary roads lacking paving, but with it, you can finish the Golden Circle or Ring Road devoid of problems as long as situations are favorable. The downside of leasing cars in Iceland that are small is that it can be somewhat uncomfortable when traveling with too much luggage or when driving on roads lacking suitable maintenance.

Luxury rental car in Iceland

For those seeking relaxation, you can obtain the use of a lavish automobile in Iceland for a period of time. These are spacious models accommodating between five to seven passengers in addition to luggage. Within the group of high-end vehicles in Iceland, there are all-terrain, Jeep, and SUV styles.

While this makes renting vehicles in Iceland more expensive, you’ll experience more ease and security no matter when and where you travel in Iceland. Therefore, if cost is not an issue for you, it’s undoubtedly the best choice of all.

RVs, an alternative to car rentals in Iceland

By making your reservation in advance, hiring an recreational vehicle in Iceland will help conserve quite a bit of funds for your journey as you won`t need to compensate for lodging. Furthermore, there are a quantity of cost-effective campgrounds in Iceland. Renting a automobile in Iceland proves to be affordable, but a RV unveils a brand new world of possibilities. Indeed, this type of car is more expensive, yet since you won`t have to pay hotel costs, it can be better worth it in the long run.

The greatest benefit of renting a campervan in Iceland is the absolute freedom it provides to individually appreciate the natural beauty everywhere and set your own schedule to explore the country

You’ll be able to drive on the F-roads and tour the Highlands only if you have a 4×4 campervan. However, with this kind of vehicle, I don’t advise crossing rivers, so look very carefully at the route you want to take. Still, you won’t have any problem reaching Landmannalaugar or other tourist areas of the Highlands since you won’t go through any river to get there.

I suggest you rent a recreational vehicle or a campervan in Iceland if you travel during the summer months. In this scenario, it is, without doubt, a fantastic experience. If you visit Iceland in winter or want to move around the Highlands, the best Iceland rental car is a 4×4 campervan.

In addition to renting a campervan in Iceland, another very popular choice is to get a 4×4 Jeep with a rooftop tent. It is, without a doubt, the best option for more adventurous travelers who want to reach the most remote areas of the Highlands but also have a safe place to stay wherever they are .

Best car rentals in Iceland

After reviewing these tips for renting a car in Iceland, you may know what you want to rent. Now, let’s delve into the top car rental companies in Iceland. Below I will discuss the local companies where we have rented vehicles during our trips to Iceland, as well as ones that receive very good reviews. Booking in advance, you will find plenty of discounts, especially if seeking special vehicles, such as 4×4 cars or motorhomes and campers in Iceland.

In Iceland, to rent a car affordably here’s an option that will help you save a lot.

1. Cheap car rental Iceland, the best place to rent cheap cars in Iceland

The organization called Cheap Car Rental Iceland is one of the better options for those seeking reasonably priced rental vehicles in Iceland.

We have rented 4×4 vehicles several times there and we have been pleased with their services. In addition to rather competitive pricing, they have all types of automobiles: inexpensive cars to drive on paved streets; 4×4 vehicles, to tour any part of the country; campervans and motorhomes so you can go at your own pace; and larger vans that are ideal for groups or for trips where you want to feel at ease.

The sole downside is their limited vehicle availability, so booking in advance may result in better offers elsewhere.

2. Iceland blue rental car, very popular car rental company in Iceland

Blue Car Rental is one of the most popular vehicle rental businesses in Iceland. Unlike other car rental companies, all of their cars are new, so you will enjoy convenience and luxury during your trip. Additionally, you can rent any kind of transportation from this company.

For travelers renting a car for over a week, the rental company provides one free day of usage every seven days, helping to reduce costs for those on extended road trips.

3. Lotus Car Rental, one of the best-rated car rental companies on Iceland

I also suggest Lotus Car Rental since numerous customers have positively rated it as one of the top companies for renting an automobile in Iceland. It’s a family-run business that will gladly assist you in selecting which vehicle to rent in Iceland, and if you have any concerns they will provide you with the one best fitted to your needs. Without doubt, it’s a highly recommended choice if you want to rent transportation and not worry further. Additionally, the employees can offer ideas about activities to partake in in Iceland.

4. Iceland Car Rental, another excellent option for rental cars in Iceland

Iceland Car Rental is also an excellent company to rent vehicles in Iceland, or any transportation since they offer all options. It’s also a highly rated company, so choosing them won’t cause any issues.

You can check our guide on Kenya open for voyaging for more details .

Cheap rental car in Iceland

If you are unaware of how to rent an inexpensive vehicle yet, take a look at DiscoverCars, one of our favorite websites to locate the best rental car in Iceland or anywhere else in the world. It’s also one of the top websites to find the best prices, which is useful if you forgot to book in advance.

This is a rental vehicle search engine that facilitates renting cars in Iceland simplly. It identifies discounts between 10% and 30% compared to renting straight from the vehicle rental company.

If wanting to rent vehicles economically in Iceland, avoid selecting extras like an extra driver or GPS navigation. Those kinds of additions make the bill rather costly and aren`t truly necessary. It`s best to have only one driver and instead of GPS use your smartphone. For Europeans, data roaming is free in Iceland but if visiting from other areas you can employ the Maps.me application which functions offline. Be sure to download our maps of Iceland too.

Car Rental at Keflavik International Airport

The vast majority of vehicle rental companies in Iceland have offices at or near Keflavík International Airport. So if you want to start your road trip as soon as you land, the best option is renting a car in Iceland airport.

Many rental car companies require payment if you opt to pick up the vehicle at the airport. Despite the additional fee, I have to say that in some cases it may be cheaper to retrieve the automobile at the airport than to pay for the shuttle into the city. You can check the shuttle pricing here.

Leasing your automobile at Iceland airport is the most practical choice, specifically if you carry a lot of baggage, and also the fastest approach to start your road expedition .

rental car in Reykjavik, the cheapest place to rent a car in Iceland

If obtaining an affordable car rental in Iceland is desired, booking in Reykjavik offers the best option. Beyond avoiding the airport fee, some of the cheapest car rental companies in Iceland can be found there.

Most vehicle rental companies have a location in the capital city of Reykjavik since there are numerous visitors and high demand for autos. If you plan to invest two or three days in the urban center before starting your trip around the island, it is extremely worthwhile to hire a transportation to the downtown area and rent your vehicle there before initiating your journey by road. This will conserve you a couple days of rental vehicle charges.

Searching for automobile rentals in the capital city of Reykjavik, Iceland can prove sensible if budget is a concern or specific attractions are on your itinerary before setting out on a road excursion throughout the island of Iceland .

Car Rental Insurance in Iceland

Traveling protected is essential, so I recommend also acquiring adequate coverage for your rental automobile in addition to selecting the highest quality travel protection.

Before leasing any supplemental insurance for your rental automobile in Iceland, check if your car coverage also covers any incident that you could face with a leased car. I also suggest reviewing in depth what kind of protection your insurance offers to see if it’s suitable for your trip to Iceland.

Whenever we go to the island, we purchase the best vehicle rental insurance. Below I explain what type of coverage you should incorporate to avoid being unprotected during your trip to Iceland, as well as those additional aspects that I don’t consider necessary or that you can omit.

Super CDW (SCDW) insurance for your rental car in Iceland

The CDW insurance provides basic collision protection, mandatory when driving a rental car in Iceland. Some Icelandic rental companies automatically incorporate it. With this coverage, you deposit $2,000 to $3,500 to address potential damages.

I suggest adding the SCDW or Super CDW, which extends the previous one. It is slightly more expensive, but the deposit will be less, around $700. In this case, it’s full coverage insurance, although certain damages won`t be covered, such as glass or damage caused by gravel, sand, and ash. If renting a car in Iceland, purchase at least CDW insurance.

Gravel Insurance for your rental car in Iceland

Adding gravel cover coverage to your CDW car insurance is highly advised, especially if you are going to drive unpaved roads. This insurance covers all the damages that the car may suffer due to the effect of gravel and stones, including the windshield, headlights, and windows.

It may seem improbable that a stone will strike your car during the trip, but it happens much more frequently than anticipated, even on paved roadways. While this insurance is recommended, it’s not compulsory. However, if you don’t obtain it, you will need to assume the costs of repairing the vehicle.

Sand and Ash Protection (SAAP) Insurance for your car in Iceland

We have never obtained this insurance protection against sand and ashes during our trips to Iceland. It covers all damages that the car may suffer in the event of a sand and ash storm. If this type of storm happens while you are driving, the car could be unusable since sand and ash can penetrate the motor and damage it. However, we have never bought it and until now it hasn’t happened to us and we don’t know anyone that has experienced this problem.

In any circumstance, I don‘t recommend driving during a sand and ash storm because, in addition to damaging the car, it can be quite hazardous. If the forecast calls for strong winds, it’s best to park the car in a sheltered place, such as next to a building that can block the wind, and wait for the storm to pass.

Theft Protection for your car in Iceland

Theft Protection for vehicles in Iceland is unnecessary. Iceland is a very safe country, one of the safest globally indeed, and your car isn’t likely to be stolen. So I don’t think this type of coverage is necessary.

Most likely, an automobile renting company in Iceland will offer you this protection, but I suggest bypassing it, particularly if you are traveling with a limited budget. Of course, the decision is yours, so if you’ll feel more at ease having it, do so !

License to rent a car on Iceland

If you plan to rent a vehicle in Iceland you will need the US Type D permit. With this, you can operate machines under 3500 kg so you`ll have no trouble with any type of vehicle like motorhomes or campervans. The equivalent license in Europe is Type B and in Canada, it is G.

Besides that, the driver must have held a full driver’s license for at least 12 months.

An International Driving Permit is not necessary if the permit uses the Latin alphabet. If not, the IDP must be requested. This is just a translation of the original driver`s license, so it is not valid alone but only with your driver`s license .

Iceland car rental age

In addition to the Type D driving permit, you need to be at minimum 20 years old to rent a car in Iceland. Some companies put some restrictions depending on the model and may require a lowest age of 23 to rent an SUV or large car in Iceland.

To lease a campervan in Iceland, contingent on the model, the minimum age varies between 20 and 23 years old. And to rent a motorhome in Iceland you must be at minimum 25 years old.

If you are between 20-25 years of age, contact the company in advance to confirm that you can rent that type of vehicle from them. Regardless of your age, you will need to have held a full driving license for more than a year .

Tips for hiring a car in Iceland

When leasing a vehicle in Iceland, many queries may arise since it’s a nation where the climate and the types of roads can cause some issues. However, I can assure you that if you rent the appropriate car, you won’t face any problem. But to clarify all your questions, you are able to check out the top tips for leasing a car on Iceland here.

1. Don’t wait until the last minute to rent your car in Iceland

Once you know the dates of your trip and the route you intend to take, I suggest reserving your rental automobile in Iceland as soon as possible to make sure the best pricing and availability. This way, you will have the ability to compare numerous companies, effortlessly choose the type of vehicle you want, and get an affordable rental car in Iceland.

2. Take photos of your Iceland rental car

Before commencing your route, I recommend taking a few minutes to carefully examine the car and capture photos of any damage you detect. Small scratches, dents, stains on the upholstery… anything you notice, photograph it and notify the rental car company staff so they can make note. Additionally, email the photos to the company. Doing so will ensure they don’t wrongly blame you later for any preceding damage and you do not unfairly cover the costs of their repair.

Take a look at the glass seeking any imperfections, ensuring the license plate is perfectly situated, and that the tires are in good shape. These are elements often overlooked and it’s crucial to check them.

3. Check the Mileage limits of your rental car in Iceland

Before booking a vehicle rental on Iceland, I suggest carefully reviewing the company’s mileage policies.

Some companies impose a mileage restriction and although initially, it seems that you are acquiring an inexpensive rental automobile in Iceland, if you drive too much, they will charge you an extra fee and it will end up being much more expensive. If you are going to travel the Ring Road, the Golden Circle, or you are going to take a journey through Iceland, I recommend you purchase unlimited miles.

4. Car Rental Fuel Policy in Iceland

For any type of car rental in Iceland or anywhere globally, I recommend examining the fuel policy since it is one of the most significant aspects of the contract.

Of all the possibilities offered to you, the best choice is Full/Full. You will collect the car with a full tank and you must return it full. This way, you can find the gas stations with the most affordable rates and refill there.

The prepaid option isn’t the more budget-friendly one because you can return the vehicle with an empty tank and it is the rental company’s duty to replenish it. So, you’ll still be charged for the cost of fuel. In this case, the price of petrol will be much higher than if you filled it yourself, so it will be more expensive ultimately.

5. Iceland Rental car collision insurance doesn’t cover for animal damage

No matter what type of insurance you select, none of the policies cover any harm that may come to the vehicle if it collides with a wild animal. It is common to see domesticated animals like horses or sheep crossing roads in Iceland, and some can dart into the road unexpectedly. Your best move is to drive carefully to avoid such an accident.

During our last trip, we nearly collided with two dark-colored sheep that walked across our path at night,, so we scarcely saw them. That’s why I advise always keeping in mind that an animal may be about to cross the road, and driving slowly.

6. There is no insurance for river crossings in Iceland

The Settlement Exhibition is a cultural institution that would be worthwhile visiting during a stay in Reykjavik. The aspect of this display that stands out most is its interactive nature, so even those not typically drawn to museums will likely appreciate it. Indeed, it offers an excellent way to occupy oneself in Reykjavik when inclement weather arises.

7. Other tips for driving in Iceland

We have created the definitive guide to operating a motor vehicle in Icelandthat outlines several tips for enjoying your road excursion. Although, I want to emphasize one suggestion in particular from this article since disregarding it can boost the cost of your rental automobile in Iceland:

Wind possesses great strength capable of opening car doors due to its forceful gusts outside of vehicles in Iceland, with travelers often losing partial or full rental car deposit amounts as a result. From within autos, the true might of wind is sometimes difficult to perceive but it blows doors freely open frequently due to powerful bursts exterior.

For safety reasons, I advise that solely the operator open the entryways for all riders. I also suggest counterbalancing to prevent a damaged hinge or worse, a dangling automobile entryway.

8. Don’t wait until the last minute to return your car in Iceland

This advice applies for any trip in which a rental vehicle will be used. If one is in haste, the staff from the rental company will inspect the condition of the car after departure, and any damage found will be deducted from the deposit.

The optimal way to ensure they won’t charge for any damages is to review the vehicle with them and request to sign off on the agreement that you have returned the car without any damage. Icelanders are incredibly kind and it has never occurred to us that they would try to charge us for harms that we hadn’t done to the vehicle (unlike in other countries). In fact, on some occasions, they have even overlooked small damages that we have caused, so I am convinced that you won’t have any problem. Still, prevention is the best policy .

Car rental on Iceland review

We rented over 10 vehicles in Iceland, from different companies and of varying types, so I believe my encounter can be useful for you.

Should you embark on an expedition trip, visiting the Highlands is a wonderful choice and for this, you will need to hire a 4×4 vehicle in Iceland. In our past three journeys, we have rented the 4×4 car with Inexpensive Car Rental Iceland and if organized ahead of time (we scheduled 6 months earlier) it is the most affordable company you will find. Here you can see reviews of car rental in Iceland with Inexpensive Car Rental Iceland.

However, on our Iceland photo tours in September, we tended to require simple spacious sedans or SUV cars and we often found lower prices on DiscoverCars. This internet site offers great deals and allows payment at vehicle selection up, which is very convenient. Additionally, if you elect to change the sort of transport at the last second, you are able to achieve it without problems.

We had previously tried Blue Car Rental but stopped utilizing it as the costs were somewhat higher (even though we had a pleasant experience with them as well). Here you can examine reviews of renting automobiles in Iceland with Blue Car.

Campervan travel in Iceland has been done just once through rental from Motorhome Republic since a quite good offer was found and the camper was great.

Iceland Car Rental FAQs

Do you still have any inquiries regarding car rentals in Iceland? We have compiled some frequently asked questions together with our responses regarding this topic.

And with that, I hope this guide assists you in choosing which car to hire in Iceland and planning a wonderful trip. If you have any inquiries or are still uncertain about which car to rent in Iceland, leave a comment and I will be pleased to help.