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Best Cheap Rental Cars in Iceland
Find the biggest selection of cheap rental cars in Iceland at the lowest prices guaranteed!

Cheap Rental Cars in Iceland

Find the best deals on car rentals in Iceland with guaranteed low prices. Choose from a wide range of vehicles and start your adventure with affordable, reliable options tailored to your travel needs. Book now and save!
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30 - 65

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Most popular cars

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Verified customer reviews

Read first-hand reviews by customers from across the world

Francine Davis
10
Amazing!

Francine Davis

Review of Blue Car Rental

We've use Blu Car rental on our last two trips to Iceland. Very customer service oriented. No issues.

Tammy Lipsett
10
Amazing!

Tammy Lipsett

Review of Auto Car Rental

The right size car to finish our trip with. There was a tire pressure sensor that had an error off an on. It would have been more comfortable to know that this is common for their fleet. The pick up and drop off were easy and a shuttle was provided to the airport. The car was clean and the staff were great to deal with.

Greg Wehn
10
Amazing!

Greg Wehn

Review of MYCAR

Great price of a new car; the one downside is that in 2 instances we were charged a parking fee despite paying at those locations. It wasn't a huge deal, but just be wary of these sorts of things. For the rental and firm itself, no complaints - friendly service and quick pickup and return. No issues other than the fines; would def use again

Sammy Jordan
10
Amazing!

Sammy Jordan

Review of Blue Car Rental

Great experience picking up and dropping off the rental. Also they were great to help me when we needed a tire repaired.

Why Choose Iceland's #1 Travel Platform

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Iceland’s Leading Travel Agency
Recognized as Iceland's Leading Travel Agency for 7 consecutive years at the World Travel Awards, we are the most trusted source for planning your Icelandic adventure.
Best Price Guarantee
Get the best rates on your rental—guaranteed. If you find a better price for the same car and conditions, we’ll match it.
Reliable Local Partners
We only work with trusted Icelandic car rental companies known for quality vehicles, excellent service, and local know-how.
Iceland’s Largest Car Rental Marketplace
Compare prices and availability from Iceland’s top car rental companies, all in one place. From compact city cars to rugged 4x4s, we’ve got every journey covered.
Flexible Booking Options
Book now and modify your reservation with ease. Many rentals include flexible terms, giving you room to adjust your plans.
Multilingual 24/7 Customer Support
Whether you're on the road or preparing for your trip, our multilingual support team is available 24/7 with help in seconds.
VIP Club
Book with us for exclusive discounts at Iceland’s best places, helping you save big on your trip to Iceland.
Iceland’s Leading Travel Agency
Recognized as Iceland's Leading Travel Agency for 7 consecutive years at the World Travel Awards, we are the most trusted source for planning your Icelandic adventure.
Iceland’s Largest Car Rental Marketplace
Compare prices and availability from Iceland’s top car rental companies, all in one place. From compact city cars to rugged 4x4s, we’ve got every journey covered.
Best Price Guarantee
Get the best rates on your rental—guaranteed. If you find a better price for the same car and conditions, we’ll match it.
Flexible Booking Options
Book now and modify your reservation with ease. Many rentals include flexible terms, giving you room to adjust your plans.
Reliable Local Partners
We only work with trusted Icelandic car rental companies known for quality vehicles, excellent service, and local know-how.
Multilingual 24/7 Customer Support
Whether you're on the road or preparing for your trip, our multilingual support team is available 24/7 with help in seconds.
VIP Club
Book with us for exclusive discounts at Iceland’s best places, helping you save big on your trip to Iceland.

Best car rentals

Check out the best car rental companies in Iceland

Small Cars: Cheap Car Rentals in Iceland and Travel Tips

Renting small cars in Iceland is one of the most practical ways to experience the country's stunning landscapes. Compact, efficient, and affordable, these vehicles are ideal for travelers exploring the country on paved roads.

Here's everything you need to know about the benefits of choosing these cheap car rentals in Iceland, securing the best deals, and making your trip stress-free.

Why Rent a Small Car in Iceland?

Renting a small car in Iceland is a practical and economical choice for many travelers. Compact cars provide an excellent balance of affordability, efficiency, and convenience for exploring Iceland's top road trip routes.

Affordability and Fuel Efficiency: Small cars are budget-friendly and fuel-efficient, making them perfect for saving money during your Iceland trip

Ease of Driving on Paved Roads: Most of Iceland's top attractions, including the Golden Circle and Ring Road, are easily accessible via paved roads. Small cars handle these routes effortlessly. 

Environmental Advantages: Small cars have a lower carbon footprint compared to larger vehicles. For eco-conscious travelers, many of Iceland's top car rental companies offer hybrid or electric compact cars.

Where to Rent Small and Cheap Cars in Iceland

Finding the right place to rent cheap cars in Iceland can save you both time and money, and here’s a breakdown of the best options:

Car Rentals at Keflavik International Airport: Rental companies are conveniently located near the terminal, offering various small and budget-friendly cars. 

Local Car Rentals in Reykjavik: Reykjavik is home to many car rental companies providing competitive rates. Renting here allows you to explore the city before starting your road trip.

Online Car Rental Services: Guide to Iceland simplifies car rental comparisons and provides exclusive deals. By booking in advance, you can take advantage of discounts, package deals, and a wide range of vehicles tailored to your needs.

Off-Airport Rental Locations: Renting from off-airport locations can help you save money as these providers often have lower operating costs. However, reaching these locations may require additional transportation arrangements.

Cheap Car Hires in Iceland: Tips for Budget Travelers

Finding affordable car rentals in Iceland doesn't have to be a challenge. With some planning and insider tips for renting a car in Iceland, you can secure the best deals for your trip.

  1. Book in Advance: Car rentals in Iceland can be costly, especially during summer. Reserving early ensures a wider vehicle selection, lower rates, and hassle-free summer self-drive tours in Iceland. In addition, mid-week rentals are often cheaper than weekend bookings.

  2. Travel During the Off-Season: If your schedule is flexible, visit during the shoulder or winter season for better deals. Rental companies often offer significant discounts during these periods.

  3. Compare Rental Providers: As you search for the best Iceland car rentals, look for perks like unlimited mileage, basic insurance, or free cancellations. 

  4. Check for Hidden Fees: When searching for cheap car hires in Iceland, always check for extra costs such as airport pickup fees, additional driver charges, or GPS rentals. Bundling these add-ons during booking can sometimes save money.

Road Suitability for Small Cars in Iceland

Small cars are ideal for Iceland's well-maintained roads, but they come with some limitations. Understanding where and when they're most suitable will help you plan your itinerary effectively.

Ideal Areas for Small Cars: Small cars are best suited for Iceland's paved roads and highways, such as the Ring Road. They're perfect for exploring Reykjavik, the Golden Circle, and scenic coastal routes.

Limitations of Small Cars: While compact cars work well on paved roads, they're unsuitable for driving on Iceland's rugged F-roads or highland trails. It's best to rent a 4x4 or SUV to avoid fines or damages.

Travel Preferences: A larger vehicle may be better if you value comfort. Solo travelers or couples on a budget will find small cars perfectly suited to their needs.

Winter Driving Tips: If you're going on self-drive tours in Iceland in winter, rest assured that rental companies are required by law to provide cars equipped with appropriate winter tires. Always check road and weather updates before starting your journey.

Travel Tips for Renting Small Cars in Iceland

Maximize your experience by familiarizing yourself with driving in Iceland before your trip and learning about how to navigate Iceland's roads safely and efficiently.

1. Pack Light: Small cars have limited trunk space, so pack compactly. Soft-sided luggage is recommended for maximizing room.

2. Know the Rules of the Road: Iceland's driving laws include mandatory headlights at all times and strict speed limits. Driving on the right side of the road is standard, and seat belts are required for all passengers.

3. Consider Optional Add-Ons: Extras like GPS devices, Wi-Fi hotspots, or additional insurance can make your trip more comfortable. Check if these are included or available for a small fee.

Frequently asked questions

What types of small and cheap cars are available for rent in Iceland?
The small and cheap cars for rent in Iceland are typically compact vehicles, categorized by their size, affordability, and age. These cars usually have a small engine capacity, and are generally priced lower than larger or newer models. They are often hatchbacks or sedans and may be three years or older. Examples include the Toyota Aygo, Volkswagen Golf, and Ford Fiesta.
What are the most popular small and cheap cars to rent in Iceland?
The most popular types of small and cheap cars to rent in Iceland are the Hyundai i10, Ford Fiesta, Toyota Yaris, and Volkswagen Polo. These are great options for driving around Reykjavik and the Ring Road.
Are small cars suitable for self-drive tours in Iceland?
Yes, the vehicles under the 'Small and Cheap Rental Cars' category are suitable for most summer self-drive tours in Iceland, when road conditions are good and snow-free. Many of these tours follow the Ring Road or other paved routes in Iceland’s countryside, which are ideal for these vehicles. However, most winter self-drive tours in Iceland require a 4WD car to handle tougher roads and challenging weather conditions.
How much does it cost to rent a small and cheap car in Iceland?
The cost of renting a small and cheap car in Iceland can vary based on several factors, including the season, length of the rental, pick-up and drop-off locations, and the rental provider. Additional options like insurance coverage or GPS add-ons can also influence the final price.
Are small car rentals suitable for all seasons in Iceland?
Small car rentals in Iceland are ideal for summer travel on paved roads, especially around Reykjavik and between towns. However, they are not recommended for winter driving in rural areas due to challenging road and weather conditions. For more details, check our guide on rental car sizes in Iceland.
Can I drive to the Highlands of Iceland with a small car?
No, you cannot drive to the Highlands with a small car, as these vehicles are not allowed on F-roads in Iceland. Small car rental vehicles are not suitable for unpaved roads, including gravel tracks, dirt paths, or mountain roads. Driving them on unsuitable roads will void your insurance coverage, leaving you liable for damages. To explore the Highlands safely, we recommend renting a 4x4 vehicle.
Are 2WD cars suitable for Icelandic winter road conditions?
While 2WD cars may manage on main roads, winter weather in Iceland often brings ice, snow, and strong winds, making driving hazardous. For safety and better control, a four-wheel-drive vehicle is strongly recommended to navigate icy roads and harsh conditions.
What sort of tires do small and cheap cars in Iceland have?
All vehicles categorized as 'Small and Cheap Cars' are equipped with tires suited to Iceland's season. After November 1st, all rental cars in Iceland must have winter tires to ensure safety on icy and snowy roads. During the spring and summer months, these vehicles are fitted with standard tires for optimal performance on paved roads.
What is included with my small and cheap rental car in Iceland?
The inclusions with a small and cheap car rental in Iceland vary by provider, so it’s important to review the 'Included' section of your rental contract. All Iceland car rentals come with CDW insurance and unlimited mileage. For more details, read our guide on renting a car in Iceland for further information.
Can I pick up my small rental car at the airport in Iceland?
Yes, you can pick up your small rental car at the airport in Iceland. Many rental providers operate at Keflavik International Airport and Reykjavik Airport, offering convenient pickup locations.
Can I sleep in my small car rental?
No, you cannot sleep in your small car rental in Iceland. Vehicles in the 'Small and Cheap Cars' category are not designed for sleeping. We recommend you rent a camper van if you want accommodation on wheels.
What documents do I need to rent a small car in Iceland?
To rent small cars in Iceland, you’ll need a valid driver’s license, a credit card, and proof of booking confirmation. Some providers may also require an international driver’s license if your license isn’t in English or Latin characters.
Are there any age restrictions for renting small cars in Iceland?
Yes. Age restrictions for renting small cars in Iceland vary by provider. Most rental companies require drivers to be at least 20 years old, and some may apply additional fees for drivers under 25.
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