Best Advice For Renting a Car in Iceland

Do You Actually Need a Rental Car in Iceland?

Whether you need a rental car in Iceland will, unsurprisingly, depend entirely on what you want to do during your visit. If you want the freedom to explore at will, unbound by any constraints, then yes, renting a car is the best thing to do. You can plan your own itinerary or go for a planned self-drive tour and simply enjoy the beautiful nature on your own terms, free to do detours and visit any location your car can realistically bring you to!

If you're staying in an accommodation in Reykjavik, renting a small car is very convinient but not a necessity to get around the Capital Region. You can also complement your stay in Reykjavik with guided tours and let someone else take care of the driving.

It's easy to do fun day trips from Reykjavik as many of the most famous attractions in Iceland are not too far away from the city. There are many available tours of the South Coast and the Golden Circle that are sure to make your visit memorable. However, there really is something special about experiencing these locations at your own pace in a rental car.

You'll want to evaluate how comfortable you are with driving in another country and consider the time of your visit. It's generally easy to drive in Iceland during summer, but if you're not comfortable driving in ice, snow, and strong winds in winter, then you may want to opt for tours instead.

• Learn more: How to Travel Around Iceland Without a Car
• See also: The Best Things to Do Near Reykjavik

Choosing a Car Rental Company in Iceland

There are many car rental companies to choose from in Iceland. That's why it's important to focus on those known for their reliability and excellent customer service. Look for companies that are highly rated, particularly ones praised for their supportive customer service and easy rental processes. Making the right choice here can really make your trip smoother and more enjoyable.

You can easily browse the best car rental options for the time of your visit and see customer reviews on Iceland's largest rental car marketplace. This is much more convinient than researching each company individually, and you'll have an easier time assessing price differences!

Keep in mind that while it's important to compare prices, it's not always best to go for the cheapest option. Sometimes, a slightly higher price includes better insurance coverage or more comprehensive customer service, which can be invaluable in Iceland's unique driving conditions.

Check for inclusive deals that cover additional drivers, GPS systems, good insurance, or other benefits, as these can be handy. Lastly, ensure the auto rental company has a clear and fair fuel policy to avoid unexpected charges at the end of your trip.

• See more: Finding Your Way in Iceland | Car Rental & Road Information

Choosing the Right Rental Car in Iceland

When it comes to hiring a car in Iceland, it is crucial to choose the right rental car that suits your needs and preferences. Here are some essential factors to consider:

• Vehicle size: Determine the type of vehicle you require based on the number of passengers, luggage, and the terrain you plan to drive on. Whether it's a compact car, SUV, campervan, or 4x4, make sure it fits your requirements. If possible, it can also be good to find cars similar to what you're used to driving at home. You can learn more about which car option is best for your trip with our guide to rental car sizes in Iceland.

• Seasonal considerations: Iceland experiences very different weather conditions throughout the year. If you're visiting in summer or only staying within Reykjavik, it's usually best to choose a small or medium rental car. If you're planning to explore the Highlands or go on a winter self-drive tour, it's best to rent a 4x4 car to tackle difficult roads and icy conditions.

• Assess your itinerary: Are there locations on your itinerary that require a specific car type? Some locations may need a 4x4 vehicle, but perhaps you'll only need a small car for the rest of your trip! In that case, consider mixing in guided tours and let someone else take care of driving to those hard-to-reach locations, especially with convinient highland tours!

• Additional amenities: Consider if you want some additional amenities with your rental car, like GPS navigation systems, Wi-Fi, child seats, or camping equipment. Assess your needs and check if these extras are available and at what cost.

• Manual or automatic: Most rental cars in Iceland have a manual transition, but you can find some that are automatic. Make sure that you choose a car with the correct transition for you! If you're used to driving a manual right-hand drive vehicle, consider getting an automatic, as it can be difficult to adjust to a gearshift in a left-hand drive car!

• Consider the fuel type: Choosing the right fuel type depends on your travel plans. Most rental cars either use gasoline or diesel, which is the most convinient and reliable way to explore Iceland. Gasoline cars are good for shorter trips, but diesel is more efficient for long journeys. You can also get electric or hybrid options for environmentally friendly travel. This is a good option in urban areas but will restrict how much you can explore during your visit.

By considering these factors and making an informed choice, you can ensure a smooth and enjoyable experience when renting a car in Iceland.

• Check out Iceland's Weather, Climate, and Temperature Year-Round
• See also: The Perfect Camping Tour Around Iceland

Tips for Finding Affordable Rental Cars in Iceland

When it comes to different car hires in Iceland, there are several ways to save money and get the best value for your rental vehicle. Here are some helpful tips to keep in mind:

• Book in advance: Planning ahead and reserving your rental car well in advance can often lead to significant savings. Prices tend to increase as the travel dates approach, so securing your booking early can help you lock in a better rate. You may even find discounts and special offers when booking during the low season!

• Compare prices: Take the time to compare prices from different providers to ensure you're getting the best deal, and consider the insurance, amenities, and services included. This is very easy to do on the Guide to Iceland car rental marketplace, so you can be sure that you’re getting the best deal possible.

• Lower accommodation cost: One of the most budget-friendly ways to travel around Iceland is with a campervan. They're usually more expensive to rent than regular cars, but in return, you'll save greatly on your accommodation. You can also mix up your nights if you don't want to miss out on the comfort of a hotel room, with some nights in your camper and others in hotels, guesthouses, or cottages among nature.

• Read the fine print: Before finalizing your booking, make sure to carefully read the terms and conditions. Pay attention to any additional fees, insurance coverage, mileage limitations, and fuel policies. Understanding these details will help you avoid any unexpected expenses.

• Drive responsibly: To avoid any potential fines or penalties, make sure to adhere to Iceland's traffic rules and regulations. Speeding tickets and parking violations can be very expensive and impact your overall budget!

By following these tips, you can ensure a more affordable and enjoyable experience when hiring a car in Iceland. Remember, saving money doesn't mean compromising on quality or service, so take the time to research and choose a reputable rental car company.

• See more about Camping in Iceland | All You Need to Know
• For more, see the Best Hotels in Downtown Reykjavik

Common Requirements for Renting a Car in Iceland

When planning to hire a car in Iceland, it is important to be aware of the rental requirements to ensure a smooth and hassle-free experience. Here are some key points to consider:

• Driving license: First and foremost, you must possess a valid driving license from your home country. If it's written in Latin letters, you can use it in Iceland, but if not, you'll need an international driving permit (IDP). Some rental companies may have additional requirements, such as needing your license to have been valid for at least a year prior to pick-up or to remain valid for 6 more months after returning the car.

• Age restrictions: Most car rental companies in Iceland require drivers to be at least 20 years old. However, some companies may have a higher age requirement for larger vehicles, typically around 23 or 25 years.

• Credit card: Having a credit card is usually mandatory when renting a car in Iceland. The credit card is used for the security deposit, which is held during the rental period and released upon returning the vehicle in good condition. Some companies may accept debit cards, but it is best to clarify this beforehand to prevent issues during pickup.

• Additional drivers: If you plan to share the driving responsibilities, it is important to include any additional drivers in the rental agreement. Each driver must meet the age and license requirements, and their information should be provided to the rental company. Including additional drivers may involve an extra fee, but it's worth it if you're planning a long road trip.

• Fuel policy: Clarify the fuel policy with the rental company. Most companies provide the rental car with a full tank of fuel and expect it to be returned in the same condition. Some companies offer a "full-to-empty" policy, where you pay for a full tank upfront and can return the car with any fuel level.

• Limited or unlimited mileage: When choosing your rental car, you'll have to decide between limited or unlimited mileage. Unlimited mileage is great for long trips, letting you explore without distance worries. Limited mileage can be cheaper and suitable for short journeys. However, remember the Ring Road is 822 miles (1,322 kilometers) long, and some limited plans may cover this distance! Always overestimate your driving distance to choose the best option.

• Road laws and safety: Familiarize yourself with the road laws and safety regulations in Iceland before driving. It is crucial to know the speed limits, traffic signs, and rules specific to the country. Iceland's diverse terrain and weather conditions require extra caution, especially when driving in rural or mountainous areas. You can prepare yourself for driving in Iceland on the Icelandic Road and Coastal Administration (IRCA) website.

By understanding and fulfilling these rental requirements in Iceland, you can ensure a safe and enjoyable journey while exploring the stunning landscapes of this beautiful country.

Picking-Up and Returning Your Rental Car

Choose the pickup and dropoff locations of your Iceland rental car carefully. Opt for locations that align with your itinerary to save time, such as picking up your rental car at Keflavik Airport upon arrival or returning it there when you leave.

If you choose to rent a car in Reykjavik, make arrangements for an airport transfer, as Keflavik Airport is around a 50-minute drive away from the Capital Area. If you happen to be arriving in Iceland at Akureyri International Airport, you can also pick up your rental car in Akureyri.

Remember to check the operating hours of your chosen locations to ensure they fit your schedule, and see if it's possible to arrange pickup and dropoff outside opening hours if necessary.

• See also: Best Hotels Near Keflavik Airport

Rental Car Inspection Checklist

When picking up a rental car in Iceland, it's important to conduct a thorough inspection to avoid any issues during your trip or disputes when returning the vehicle. Here's a checklist to follow:

1. Exterior Inspection:

   • Check for any scratches, dents, or damage on the body.

   • Inspect the windshield and windows for cracks or chips.

   • Ensure all lights (headlights, taillights, turn signals) are functioning.

   • Verify the condition of the tires, including tread depth and any visible damage. If you're visiting Iceland between November and April, make sure the car has winter tires!

2. Interior Inspection:

   • Check the upholstery for stains, tears, or damage.

   • Ensure all seat belts are present and functioning.

   • Test the air conditioning, heating, and other climate controls.

   • Verify the operation of the audio system and similar features.

3. Under the Hood:

   • Check fluid levels (coolant, windshield washer fluid).

   • Look for any signs of leaks or damage in the engine compartment.

4. Documentation:

   • Ensure the car's registration and insurance documents are present.

   • Familiarize yourself with the rental agreement, especially regarding fuel policy and emergency procedures.

5. Safety and Convenience Features:

   • Confirm the presence of a spare tire, reflective triangle, and necessary tools (jack, lug wrench).

   • Test the GPS system if included.

   • Familiarize yourself with the car's specific features and controls.

   • Check if a first aid kit is available. If not, get one before starting your journey.

6. Photographic Evidence:

   • Take time-stamped photos of the car's condition at pickup, focusing on any existing damage.

By following this checklist, you can ensure that the rental car is in good condition and avoid potential disputes or additional charges upon return.

Understanding Icelandic Rental Car Insurance

Considering rental car insurance in Iceland is crucial for a safe and stress-free driving experience. Standard with most rentals is the Collision Damage Waiver (CDW), which limits your financial liability for damage to the rental car, though it typically includes a deductible. Some companies might refer to this as a loss damage waiver, but it's distinct from a liability waiver, which usually covers third-party damages.

Be cautious about relying solely on credit card insurance for coverage. It varies and might not fully align with Iceland's unique driving conditions, potentially leaving some common damages uncovered. For more comprehensive protection, especially when driving extensively, the Super Collision Damage Waiver (SCDW) is highly recommended. This option significantly reduces the deductible and offers broader coverage.

Keep in mind that it won't cover everything that can go wrong, however, with the most common not-covered damage being wind-blown car doors! Make sure to get familiar with the details of your coverage and hold on to your car door when you open it!

Gravel Protection is also crucial as many of Iceland's roads are gravel, and this insurance covers the damages caused by gravel hitting the car, which are quite common. You'll also want to get roadside assistance coverage if it's not already included in your rental price.

You can also consider adding Sand and Ash Protection to your rental. Strong winds can easily whip up sand, potentially damaging the car's paint and more. Additionally, while less common in Iceland, opting for Theft Protection provides an added security layer against the rare possibility of car theft.

Each of these insurance options addresses specific risks associated with driving in Iceland, providing peace of mind and protecting you from potentially hefty repair bills. It's easy to compare included and additional insurance when you browse the Guide to Iceland rental car marketplace, so you can enjoy peace of mind when adequately covered for your journey.

 Dealing with Emergencies and Breakdowns in Iceland

Dealing with emergencies and breakdowns while using a rental car in Iceland requires a calm and prepared approach. Here are some tips to help you manage such situations effectively:

• Emergency contact information: Always have the rental company’s emergency number and local emergency services number (112 in Iceland) handy. Also, keep an eye on the SafeTravel website or download their app and submit a travel plan so they can locate you in case something happens.

• Stay safe: If you experience a breakdown, pull over to a safe location. Use hazard lights to alert other drivers, especially in areas with low visibility.

• Assess the situation: Quickly assess what might be wrong with the car. If it's a minor issue like a flat tire and you feel confident, you might fix it using the tools provided. Otherwise, it's always best to call for assistance.

• Don’t attempt unauthorized repairs: Avoid trying to fix anything beyond basic issues to prevent further damage or voiding the rental agreement.

• Document the incident: Take photos or notes of the situation and any damage for insurance purposes and for the rental company.

• Inform the rental company: Contact your rental agency as soon as possible. They can offer guidance, arrange for a replacement vehicle if necessary, and handle insurance procedures. If your rental agreement includes roadside assistance, don't hesitate to use it. They can provide professional help and, if necessary, towing services.

• Stay with your vehicle: Unless you're in immediate danger, stay with your vehicle. It's easier for assistance to locate you and ensures the security of the car.

• Be prepared for weather conditions: In case of emergencies, it’s good to have warm clothing, water, and snacks in the car, especially in remote areas or during winter.

By following these tips, you can handle rental car emergencies and breakdowns in Iceland more effectively and ensure your safety and well-being during your travels.

General Tips for Driving in Iceland

While you'll need to get thoroughly familiar with traffic laws before driving in Iceland, here are some tips to keep in mind for a pleasant road trip experience:

• Be prepared for weather changes: Icelandic weather can be unpredictable. Check the Icelandic weather forecast regularly and be ready for sudden changes like ice, snow, wind, or rain. Also, keep an eye on the changing road conditions during your travels.

• Drive carefully on gravel roads: Many rural roads in Iceland are gravel. Slow down to avoid skidding and windshield damage from flying stones, and keep your distance from other cars!

• Respect single-lane bridges: You'll come across multiple single-lane bridges when driving the Ring Road. Yield to traffic that is closer to the bridge or already crossing. Proceed with caution.

• Do not drive off-road: It's illegal and harmful to the environment, and doing so will result in very high fines. Stick to marked roads and paths.

• Watch for animals: Sheep and other wildlife can unexpectedly cross the road. In summer, keep an eye out for sheep by the side of the road and drive slowly in rural areas to avoid accidents!

• No right turns at red lights: While this is common practice in some countries, it is not allowed to make a right turn at a red light in Iceland. It will be considered as running a red light!

• Use maps and GPS wisely: While GPS is helpful, it's good to have a physical map as a backup, especially in remote areas.

• Know your fuel: Be aware of whether your car uses diesel or gasoline to avoid engine damage. Plan fuel stops on longer trips, as stations can be sparse in remote areas.

• Drinking and driving: Before treating yourself to a beer or glass of wine, you should know that the blood alcohol limit in Iceland is very low, at 0.05%. Skip that drink with lunch or dinner if you plan to drive afterward.

• See more about How to Drive Safely in Iceland

FAQs about Renting a Car in Iceland

 Here are some of the most common FAQ's about renting a car in Iceland.

Where do I find the best prices on car rentals in Iceland?

For the best prices on car rentals in Iceland, the best place to search is the Guide to Iceland travel marketplace. You'll find a comprehensive selection of rental car options, offering a range of vehicle types at competitive rates. It's a user-friendly site that allows you to easily compare prices and find deals that suit your budget and travel needs.

How far in advance should I book my rental car in Iceland?

It's advisable to book several weeks to months in advance, especially before the peak tourist season, for the best selection and rates.

What documentation is required at the time of rental car pickup in Iceland?

Make sure to bring a credit card for the security deposit, and you'll need a valid driver's license. If your license is not written in the Latin alphabet, you'll also need an International Driving Permit.

What should I do if I get a parking ticket or speeding fine in Iceland?

Report it to the rental company as soon as possible. They will guide you on how to pay the fine.

What happens if I lose the keys to my rental car?

Immediately inform the rental company. Replacement keys can be provided, but you may be charged for them, depending on what type of insurance you bought with your rental car.

What happens if I return the rental car late?

Late returns may incur additional charges. It's best to inform the rental company if you anticipate a delay.

Can I drive the entire Ring Road with a standard car?

Yes, a standard car is suitable for the Ring Road throughout most of the year. If you're planning a winter Ring Road trip, you'll need a larger car, preferably a 4x4 vehicle. For F-roads (mountain roads), a 4x4 rental is necessary.

How is the road quality in Iceland, and what should I expect?

Iceland's main roads, like the Ring Road, are well-maintained. However, secondary roads, especially in rural areas, can be gravel or unpaved, requiring careful driving.

Are winter tires provided for rental cars during the colder months in Iceland?

Yes, winter tires are provided by rental companies during the winter months, between November and April, as per Icelandic law.

Are there any specific rules for parking rental cars in Iceland?

Always park in designated areas. Parking in Reykjavik, Akureyri, and popular attractions often requires payment, which can be done via parking apps or meters.

• For more: Parking in Reykjavik - Everything You Need to Know
• See also: Top 10 Apps for Traveling in Iceland

Would you rent a car in Iceland or prefer the convenience of guided tours? What kind of car would you choose for your visit? Have you driven around Iceland before, and do you have recommendations? Share your thoughts with us in the comment section below!