Rent a car in Iceland

Rent a car in Iceland

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Why rent a car with us?

When you rent a car in Iceland, you give yourself the freedom of exploring this breathtaking country in your own time, and at your own pace. Self-drive tours are becoming increasingly popular, as adventurous travellers devise their itineraries and set out to see the incredible nature by themselves. What many would-be self-drivers don't realise, however, is that the driving conditions in Iceland are fairly challenging and that the rugged landscape and unpredictable weather pose difficulties that many haven't faced before. If you're planning to drive around Iceland during your stay, it is important to be aware of the following information.

Where to rent a car in Iceland

Most car rentals in Iceland are based in the capital city, Reykjavík, or by the international airport in Keflavík (a 40-minute drive away from Reykjavík). For travellers that plan on driving the whole time they are in Iceland, it's mostly convenient to hire a car from the international airport and then return it at the airport before the return flight. It does not matter what time of day or night your flight arrives, you can pick up your car 24 hours a day at the airport. If you only want to rent a car for a part of your stay, then it's also possible to rent cars from Reykjavík, which most people tend to use as a base. It is possible to pick your car up in Keflavík and drop it off in Reykjavík, or vice versa, sometimes for an additional fee but some companies don't add any extra fee. 

There are also car rentals available around the country, such as in Akureyri and Siglufjörður in the north, Egilsstaðir and Höfn in the east, Selfoss and the Westman Islands in the south, Patreksfjörður and Ísafjörður in the Westfjords and in Ólafsvík on the Snæfellsnes peninsula. Car rentals are available in most larger towns in Iceland's countryside. Note that in those locations there may however only be one or perhaps two car rental agencies, so you will have limited choices of cars. Please contact Guide to Iceland's office if you're looking to rent a car outside of Reykjavík or Keflavík. It is also possible to rent your car in one location in Iceland and drop it off at another, for an additional fee, which needs to be done through contacting Guide to Iceland's booking team at info@guidetoiceland.is

Please note, that even though you pay for the rental car using a debit card, most companies do require you to provide a valid credit card on the day of pick up. 

The road network

The most used road is Iceland is its Highway 1, which encircles the country and is your best bet for travelling around quickly and safely. Being Iceland's most important road, it is well-maintained and open throughout the year, although extreme weather conditions can sometimes lead to temporary and partial closures, especially during the winter months. Highway 1 is just two lanes wide, but you will seldom see any traffic in rural Iceland. It is, however, dotted with many one-lane bridges. The rule when crossing these is that the right of way goes to the driver who is closest, so always approach slowly to make the correct judgement, even if you don't see anyone ahead. 

Most other roads, such as those leading to popular destinations such as the Golden Circle and the Blue Lagoon, are tarmac. If you stray into the wilderness, however, you are increasingly likely to encounter gravel tracks. These can be narrow and very bumpy, thus should be traversed with caution, especially by those who are not used to such conditions. They can, however, be driven on by all vehicles. F-Roads in Iceland are only accessible if you rent a jeep or four-wheel drive, however, and can be quite daunting, crossing rivers and winding along narrow mountain passes. Only confident drivers should take these routes. 

Although they come with a unique set of risks, the roads in Iceland are perfectly safe to drive if you act with care and good judgement, and know your limits.

Rules and regulations

It is imperative that travellers who rent a car in Iceland are aware of laws here that are different to those of their home country, so be sure to take the following notes.

To rent a car, you must have had a valid driver's license for one year, and be at least 20 years old. To rent a minibus or a four-wheel-drive, you must be 23. Your license must be in characters of the modern Latin alphabet, or accompanied by an official translation.

The speed limits are generally lower than in other European countries due to the hazards associated with driving in Iceland. The maximum speed limit on paved highways in the countryside is 90 km/h; on gravel roads, the limit is 80 km/h, and in towns and cities, generally 50 km/h. If you are unsure or if the area is not signposted, it is best to assume the limit is 50 km/h. In some areas, there are signs encouraging you to reduce speed, but it is generally expected that drivers will use common sense and choose a safe speed according to the conditions. More common are signs indicating specific hazards ahead, such as sharp bends or exposure to high winds.

For safety reasons, motorists are obliged by law to keep headlights at all times, even during summer when the sun does not set. Blind corners are common, and, of course, the deep winters are notoriously dark; even at midday, it is barely brighter than during the twilight hours. As in most countries, all passengers are required by law to wear a seatbelt. Driving under the influence of alcohol, or using a mobile phone while driving, is strictly forbidden. Speeding fines are high, and there are many traffic cameras throughout the country.

It is only legal to travel F-roads if you rent a jeep or a four-wheel-drive; and only if they have been opened for summer season. It is against the law, and foolish, to travel on any roads that are cordoned off for safety reasons.

The fragile, delicate nature of Iceland's wildlife means that driving off-road, outside of official tracks, is strictly forbidden and punishable by fines of over 350,000 ISK and even a jail sentence of up to four years. Much of the country's volcanic landscape has been formed over millions of years, and the haunting moss that creeps across it takes centuries to grow. Driving carelessly through vegetation will cause catastrophic damages. Please, respect our nature during your stay.

If you have an accident or need urgent help, call 112 for emergency services.

Off the beaten track

The majority of roads within Iceland's interior have a loose gravel surface, many are narrow, and some are raised from ground level to prevent weather-related closures. Although they are safe to drive, they present a unique set of hazards you should beware of if you plan to rent a car in Iceland.

Many accidents that visitors to Iceland have are when leaving a tarmac road for a gravel one; they approach too fast and lose control of their vehicle. Drivers should always slow down and stay focused when the surface of the road is changing, and if the car does begin to slide on the gravel, to release the gas and steer gently in the direction it is pulling. Slow down when you see oncoming traffic, and move as close to the right-hand side as is safe; beware that the loose road surface means it's easy to kick up rocks and stones, so practice this even if the roads are wide. 

Should you decide to rent a jeep in Iceland, you will be able to access the country's most remote reaches; the best time to do this is in summer, as before June, snow blocks and muddy conditions make many mountain and interior roads completely impassable. These roads can be very challenging to traverse, so it is always recommended that two or more four-wheel-drive vehicles travel together. It is also advised that you leave your travel plan at Safetravel.is.

You should always know what the road conditions will be before you set out, and you can check this on the website of the Icelandic Road and Coastal Administration.

Don't forget the weather

The unpredictable, extreme weather in Iceland can make driving even Highway 1 a challenging experience. In winter, snowstorms, high winds, dense fog, icy roads, and perpetual darkness can complicate the simplest of journeys and such conditions need to be prepared for. Before setting out anywhere, check the weather in Iceland on the website of the Icelandic Meteorological Office. Heed bad weather warnings, and always err on the side of caution, especially if you do not have experience driving in these conditions. Throughout summer, the weather in the west and south is usually a lot less rough, but it is always wise to check out the prediction before starting your day.

Overall, drivers who are aware of the weather, the road conditions and their own driving skills, and who rent the right vehicle for what they plan to do, will have a safe and enjoyable time driving through the incredible beauty of Iceland. Make sure you know the rules and take all necessary precautions, and the whole of the country will be at your fingertips. 

If you seek more information, please check out this ultimate guide of driving in Iceland.

Frequently asked questions

What sort of car should I rent for travelling in Iceland?

When deciding upon what sort of car you should rent for your travels in Iceland, there are mainly two factors that you should consider. The first is the group you will be travelling with. How many are in it and how much luggage will they have? You will have to take into account that when choosing a car, it does not only need to have enough seats, but also the luggage space for whatever your companions and yourself will take with you. If you are planning to use your car as accommodation, a camping van is recommended. Secondly, you should pay attention to the season. If you are travelling in Iceland in the period between October and April, it’s highly recommended that you rent a 4x4 vehicle, an SUV or a jeep, in case of ice and snow, as those cars are higher than the regular vehicles, making it easier for them to pass over snow. In summer, if you are planning to travel around the country, due to ever-changing road conditions, a jeep or an SUV is also recommended. In summer, if your itinerary will take out off the beaten track, or outside the south coast area, an SUV is also recommended, but not as vital as in winter.

Is the car I have chosen suited for driving around Iceland in all seasons?

Cars that belong to the 4x4 Jeep/SUV category and the Luxury category are suited for all regular travel in Iceland, regardless of the season. Cars belonging to the Camper Van category are also suited for all seasons, but please keep in mind that Iceland, in general, it is not recommended to camp during the winter months and all services to campers are usually closed form the end of September each year. Cars in the Small & Cheap category are labelled by the manufacturer as city cars, meaning they are well suited for driving in the city and in settlements. Depending on the weather, they might be unsuitable for rural winter driving and it is not recommended to choose a car from this category if you are planning to travel around Iceland during the winter months. In summer, these cars are sufficient for all asphalt travel in Iceland.

Is the car I chose suitable for Highlands travel?

Cars marked as Small & Cheap cars are not suited for the highlands or gravel roads. These cars are made exclusively for asphalt travel and are not suitable for any F-roads, gravel paths, or dirt roads. Some cars belonging to the Luxury, 4x4 Jeep/SUV and Camper Van categories are suitable for travelling off asphalt. Each car is marked specifically if suitable for highland travel. In some cases, cars will have a specific listing if there are certain highland roads that they are not suited for. Please note that driving a car not marked for highland travel or a Small & Cheap car on any F-roads will void any insurance you might have purchased. You will then be liable for any undercarriage or suspension damage that might occur.

What sort of tires do rental cars have?

In summer, all cars will be fitted with typical summer tires. In winter (After November 1st), they will have studded winter tires suited for winter travelling.  

What is included in the rental?

It varies from rental to rental what is included with the car. Some rentals offer GPS devices, other additional insurance, but please read the description carefully and go over the ‘included’ section before you finalise the booking. Included in all rentals are unlimited mileage and CDW insurance. The CDW insurance covers all damage that you might cause with the car, e.g. other vehicles or items hit with the car, and compensation for individuals that might be harmed. For Camper Vans, many rentals also offer free camping equipment alongside the main purchase, but as it varies what a camping box includes, please read the vehicle description carefully.

What sort of cars are considered Small & Cheap cars?

The Small & Cheap Cars section contains vehicles that are in the smallest size category, or alternatively, those that are three years old or older. These cars are often priced lower than larger or newer rental models. Vehicles such as Toyota Aygo and Citroen C1 go into this category, as well as slightly larger cars such as Volkswagen Golf and Toyota Yaris. These cars do not have 4WD or AWD.

What sort of cars are considered 4x4/SUV's?

Cars in this category are larger vehicles, often suitable for five to seven passengers and their luggage. Most options have 4WD or AWD, though some are regularly-geared vehicles. All of them are slightly elevated to better suit snow and gravel conditions. In this category, models include the likes of Toyota Rav4 and Suzuki Vitara.

What sort of cars are considered luxury vehicles?

Cars in this category are larger vehicles, often suited for five to seven passengers and their luggage, brand new and offering high-end comfort. Most of them have 4WD or AWD, though some are regular vehicles. Most of them are elevated to better suit snow and gravel conditions, though this category also houses sports cars and high-end hatchbacks. In this category are models such as Toyota Land Cruiser and Range Rovers.

What sort of cars are considered campers and camper vans?

This category contains all vehicles that can double as accommodation, be they motorhomes, smaller camping cars or cars equipped with attached camping gear or rooftop tents. The models range from small, converted campers, such as Volkswagen Caddy, to rooftop tent jeeps for highlands travel, such as Suzuki Jimny and Mitsubishi Pajero.

What is the difference between a camping van and a car with a rooftop tent?

A camping van is a converted moving van that has been made so that there is space for sleeping comfortably inside it. The rooftop tent vehicles have a foldable tent on the top of the car, accessible by a ladder. The rooftop tent is closer to regular camping, while the vans are more in the line of a very small motorhome. 

Is there a minimum age for renting a car in Iceland?

The minimum age varies depending on the rental company as well as on the category of the vehicle. However, most companies have a minimum age of 20 years.

Which documents are required for renting a car in Iceland?

The driver must hold a full licence (in a Latin alphabet) for at least a year to be able to rent a car. The driver needs to have a physical copy of the license present with them when picking up the car. Most rental companies also require a valid credit card (not prepaid) in the name of the main driver.

I have a foreign driver’s license. Is it accepted?

All foreign driver's licenses are accepted as long as they are valid and have Latin characters. If the license is not in Latin script, it must be accompanied by an International Driving Permit.

Can an existing booking be amended?

If you want to edit your reservation after receiving the confirmation, please use the orange ‘Edit booking’ button on your electronic voucher. Extensions are possible based on availability, and extra charges are subject to the duration of the extension. In case of any questions, please send us an email to info@guidetoiceland.is.

Can I return the vehicle early?

Yes, early returns are allowed, but no refund is due unless the amendment has been requested prior to the pick-up date.

Do I need to pay a deposit when I pick up the car? How much is it?

The deposit is usually equal to the CDW self-risk amount mentioned on the car rental booking page, and the number can vary between rental companies. Usually, purchasing Premium or Platinum insurances exempts you from paying a deposit. You can find this information on the car booking page under “Vehicle Information”. If you require more details, please contact the car rental company directly by clicking on the "Inquire about this car" button below the reservation form.

Which insurances do I need? Which ones are recommended?

CDW (Collision Damage Waiver) insurance is included by default for all the car rental reservations. Most car rental companies also offer the option of adding SCDW (Super Collision Damage Waiver), TP (Theft Protection), GP (Gravel Protection) and SADW (Sand & Ash Damage Waiver) insurances, as well as complete coverages, such as Premium or Platinum insurances which usually reduce the self-risk to zero. These are the most recommended options for a carefree trip, especially if you’re travelling during the winter season.

How do I change or cancel my car rental reservation?

You can make changes or cancel your car rental reservation for a full refund up to 24 hours before pick-up date and time. This can be done by clicking on the orange ‘Edit booking’ button on your electronic voucher.

What if my flight has been delayed?

If your flight has been delayed, please inform the car rental company directly through the phone number listed on your voucher. However, including your flight number on your reservation will help the car rental company track your flight and be aware of any changes ahead of time. Please use the orange ‘Edit booking’ button on your electronic voucher to add your flight number.

Can I return my car outside of office hours?

Some but not all car rental companies offer pick-up/drop-off services outside of office hours. Please contact your car rental company directly for further information and note that extra charges may apply.

Can I extend my car rental reservation once I have picked up the car?

Yes, if the car is available. Please contact us or your rental company directly to request an extension.

Can I pay the deposit with a credit card different from the one I used online?

Yes, you can make a deposit with any credit card, as long as it is in the name of the main driver.

Is there any car rental that offers zero-deductible insurance?

Yes, many car rentals offer zero-deductible insurance. If available, it is listed in the insurance options of a specific vehicle’s booking page.

What damages are not covered by any insurance?

There are several damages that are always NOT covered by any insurances: Damages caused by negligence; Damages caused by driving into waters and rivers and when driving off-road; Driving while intoxicated or under the influence of drugs; Damage to tires, headlights, and underside of the car; Damage caused by the wind blowing out a car door. Each rental company has its own terms and coverages, therefore, we highly recommend checking for more details on the contract you sign when picking up the car.

Will the cars have winter tires and snow chains during winter?

All rental cars come equipped with winter tires from 1 November until 14 April. Snow chains are not allowed in Iceland as they damage the paved roads and are not needed. Studded tires are common in winter tires but not mandatory for rental cars. The vast majority of car rentals equip them in their cars.

How do I pick up/drop off the car?

Different car rentals have different procedures for pick-up/drop-off. Please find more details on your electronic voucher and contact the rental company directly in case you need any further information. You can find their contact details at the top of your voucher. Please note that in case of airport pick-up, the car is not delivered to the airport, but you will be driven to the rental office near the airport to pick it up.

Do I need a credit card?

Customers need to present a valid credit card in the name of the main driver upon picking up the vehicle. If the person registered for the rental does not have a credit card with them, the extra driver needs to be registered using their credit card and they must have a valid driving license. If there is no credit card, the rental company will ask for a deposit. The amount can vary depending on the rental company.

Can I use a different card upon pick-up?

Yes, but please note that the card needs to be in the name of the main driver.

Can I rent a car, if I am younger than 20 years old?

No, all car rental companies require you to be at least 20 years old to rent a car in Iceland. For some vans the age limit is 23 years.

Can I rent a car without a deposit?

Most companies require a deposit, however, a few, do not require a deposit. Please check the details of each car rental company on our website.

Can I forfeit CDW?

You can forfeit the CDW but this is something we do not recommend in any case since you will be personally liable for all and any damages that occur to the car, occupants and other people involved. This can amount to millions of ISK. We understand that your credit card company will cover for you - but you will be asked to pay in front if this was the case. If you wish to proceed, please let the car rental know once you collect the car, but we do not recommend this in any case.

Which is better, diesel or petrol?

Diesel cars are usually more fuel-efficient in the rest of Europe, however, compared to Iceland, the difference between petrol and diesel cars is not significant, as there are not many highways in the country. There is also no significant price difference between the two fuel types with diesel being only slightly more economical. In terms of environmental impact, diesel has higher emissions than petrol. Please note that your rental company can give you a diesel car even if you have reserved a model with a gas engine and vice versa.

Which is better, automatic or manual?

Manual cars are more fuel-efficient than automatic cars. Most people with experience in driving a manual vehicle prefer it on Icelandic gravel roads, as it gives the driver more control over the vehicle. With a manual gear shift, drivers can anticipate an oncoming condition, whereas an automatic car will shift only when the conditions are reached. This is particularly useful driving in winter, as slippery roads are a regular occurrence in Iceland. However, with an automatic, you gain easier use through not having to change gears yourself. They’re also better for hilly areas. So, the choice completely depends on your previous experience with cars.

Where can I buy fuel cards in Iceland?

There are no fuel cards sold in Iceland. However, most car rental companies will provide you with a discount chip that you can use in certain petrol stations around Iceland.