Comprehensive Guide to Renting a Car in Iceland

Renting A Car In Iceland

Renting a car in Iceland is a fantastic way to explore the country at your own pace. With its diverse landscapes and remote locations, having your own vehicle provides flexibility and convenience. This guide will cover everything you need to know about renting a car in Iceland, ensuring a smooth and enjoyable journey.

Best car rental in Iceland

Why rent a car in Iceland?

Freedom and flexibility

Having a rental car allows you to explore Iceland’s natural wonders beyond the typical tourist routes. Unlike guided tours, you can create your own itinerary, visit lesser-known sites, and spend as much time as you wish at each location. Whether it’s a sudden desire to stop at a picturesque waterfall or a spontaneous detour to a secluded hot spring, a rental car gives you the freedom to travel at your own pace.

Access to remote locations

Many of Iceland’s most breathtaking spots are in remote areas, far from the reach of public transportation. With a rental car, you can easily reach these hidden gems, such as the stunning Westfjords, the highlands, or the less-visited Eastfjords. Public transportation is limited and infrequent, especially in rural areas, making a car rental a practical choice for those looking to fully experience Iceland’s diverse landscapes.

How To Rent A Car In Iceland


Renting a car in Iceland means you don’t have to adhere to bus schedules or wait for group tours. You can start your day early or extend it late into the evening, taking advantage of the midnight sun in summer or chasing the Northern Lights in winter. This convenience is particularly valuable given Iceland’s varying daylight hours and weather conditions.


Traveling by car allows you to carry your belongings with ease, including snacks, extra clothing, and photography equipment. This is especially useful for photographers, hikers, and families who need to bring more gear. You can also create a comfortable environment in your car, adjusting the temperature and making frequent stops as needed.


Driving your own vehicle provides a safer and more controlled travel experience. You can avoid crowded buses and potentially reduce exposure to illnesses. Additionally, having your own car means you can quickly respond to changing weather conditions, such as snowstorms or heavy rain, by seeking shelter or altering your route.

How to rent a car in Iceland

Choosing a car rental company in Iceland

Iceland has numerous car rental options, ranging from international brands like Avis and Hertz to local companies. It’s advisable to start your search with aggregators that provide a broad view of options and prices. For detailed information on where to start, check out our guide on the best car rental companies in Iceland. Booking directly with the rental company often provides better rates and customer service.

Choosing A Car Rental Company In Iceland

Vehicle types

Sedans and small cars

These are the most economical options, suitable for driving on paved roads in good weather. However, they are not recommended for winter driving or traveling on F-roads (mountain roads).

SUVs and 4x4s

These vehicles are ideal for Iceland’s diverse terrain and unpredictable weather. They offer more space and are capable of handling F-roads, provided the rental agreement allows it. Always confirm if your vehicle is approved for off-road use.

Camper Vans and RVs

Perfect for those looking to combine transportation and accommodation. Camper vans are best in the summer months when campsites are open. However, they can be challenging to drive in strong winds and are not suitable for winter conditions.

Insurance Options

Types of Insurance

  • Basic Insurance: Usually includes Collision Damage Waiver (CDW), which covers damage to the rental car.
  • Super CDW: Lowers your deductible significantly.
  • Gravel Protection (GP): Covers damage from gravel roads, a common cause of vehicle damage in Iceland.
  • Sand and Ash Protection (SAAP): Covers damage from volcanic ash and sandstorms.


Never skip insurance. The rugged landscape and weather conditions increase the risk of damage. Even with full insurance, some situations like driving under the influence or water damage may not be covered. Always read the fine print and understand the terms.

Driving conditions in Iceland

Driving Conditions In Iceland

Summer vs. Winter


  • Advantages: Longer daylight hours, clearer roads, more accessible attractions.
  • Considerations: High tourist season, higher prices.


  • Advantages: Northern Lights, fewer tourists, unique landscapes.
  • Considerations: Snow and ice on roads, shorter daylight hours, some roads may be closed.

Road Types

  • Paved Roads: Most of the Ring Road and main highways.
  • Gravel Roads: Common in rural areas, can be rough and cause damage.
  • F-Roads: Mountain roads that require a 4×4 vehicle, open only in summer.

Rental Requirements

To rent a car in Iceland, you’ll need:

  • A valid driver’s license (an international license is not required if it’s in Roman script).
  • A credit card for the security deposit.
  • Most companies require drivers to be at least 20-23 years old.

Tips for renting a car in Iceland

Booking Tips

  • Book Early: Secure better rates and ensure vehicle availability.
  • Consider the Season: Prices are lower in the off-season.
  • Know Your Route: If you’re sticking to main roads, a standard car may suffice. For exploring remote areas, opt for a 4×4.

Cost-saving Tips

  • Manual vs. Automatic: Manual cars are cheaper.
  • Length of Rental: Longer rentals often have lower daily rates.
  • Gas Discounts: Some rental companies provide fuel discount cards.

Safety tips

  • Drive Carefully: Respect speed limits, watch for sheep on roads, and avoid driving in severe weather.
  • Keep Fuel Topped Up: Gas stations can be sparse in rural areas.

Frequently Asked Questions

Is it recommended to rent a car in Iceland?

Yes, renting a car is highly recommended for exploring Iceland’s vast and diverse landscapes at your own pace.

Can a US citizen rent a car in Iceland?

Yes, US citizens can rent a car with a valid driver’s license. An international driving permit is not required.

How much do car rentals cost in Iceland?

Prices vary based on the vehicle type and season but generally range from $50 to $150 per day. Additional costs include insurance, fuel, and optional extras.

By following these Iceland car rental tips, you can ensure a safe, enjoyable, and memorable trip. Whether you’re exploring the bustling streets of Reykjavik or the remote highlands, having your own car offers unparalleled freedom and flexibility. Happy travels!

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