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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 — Biggest Selection & Lowest Prices Guaranteed

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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Verified customer reviews

Read first-hand reviews by customers from across the world

Sam Bourns
10
Amazing!

Sam Bourns

Review of MYCAR

Very easy to book through Guide to Iceland! Rate was very competitive, we got a brand new Land Cruiser to drive for the week, which accommodated all 5 of us. The staff at Mycar was very friendly and helpful as well! Overall a great experience!

Ashley Clifford
10
Amazing!

Ashley Clifford

Review of Project Car Rental

This car was perfect! Very spacious, Apple car play worked perfectly, there are mats on the floor to catch dirt and mud, and even told us the speed limit and other important traffic rules. Pick up and drop off were very clear and easy, and it was only ~3 minute walk from the airport. The car was in great condition when we first got it, and worked perfectly throughout the entire trip. We really appreciated the discount on gas and the free map of Iceland, this truly made our great experience even better. The company was very responsive and extremely helpful when we had questions. There were no hidden fees, and everything we received was exactly as anticipated/requested. I could not have asked for a better experience using Project Car Rental!! When we return to Iceland, we will definitely be using Project Car Rental again.

Agius Benedicte
10
Amazing!

Agius Benedicte

Review of Geysir Car Rental

Très bonne voiture, prise et dépose très facile à l’aéroport, véhicule en.super état.

Olga
10
Amazing!

Olga

Review of Northern Lights Car Rental

From the moment we arrived, our experience with this company was outstanding. We were promptly greeted at the airport, and a shuttle bus quickly transported us to their rental office. The vehicle we received was clean, comfortable, and very spacious, making our journey exceptionally pleasant. Returning the car was just as smooth – as soon as we dropped it off, the shuttle bus promptly took us back to the airport. We highly recommend this company for their professional, efficient service and excellent customer care.

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's paved roads and urban areas. 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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