Renting a Car in Iceland: Everything You Need to Know

Renting a car in Iceland is the easiest and best way to get around. While Reykjavik is a very walkable city, you have to get out of the city to see the real Iceland. I'm sure it's the beautiful, vast, breathtaking, incredible, awe-inspiring scenery that made you want to travel to Iceland in the first place.

It's possible to take some forms of public transportation and coach bus tours, these are extremely limited. You will be limiting yourself to visit only a few places that are the most popular. When we traveled to Iceland on a two week road trip, we quickly discovered that renting a car in Iceland was the best choice. You have complete freedom to drive anywhere you want, anytime you want, entirely on your own schedule.

In this travel blog guide to renting a car in Iceland, we're going to show you everything you need to know in order to have a great experience. This includes:

• Where to rent a car in Iceland, rental car companies, and how to find the best prices
• Detailed information on whether or not you need a 4x4 car in Iceland
• The Ring Road vs gravel roads vs F-Roads (What's the difference?)
• Whether or not you need extra car insurance
• The type of vehicle and the best rental car
• Where to rent your car (from the Keflavik airport or Reykjavik)
• Important safety tips and practical tips for planning your Iceland road trip

Looking for more car rental guides from around the world? Check out our guides to renting a car in Ireland, renting a car in New Zealand, and how to rent a scooter in Bermuda (where renting a car is not permitted!).

How to Rent a Car in Iceland: Book in Advance!

If there's one thing that I can suggest in advance: book your car well in advance of your trip! Especially in high season, rental cars in Iceland sell out (June to August). You'll need to secure your vehicle ahead of time. I recommend using Discover Cars to compare the rates of car rentals in Iceland. Their booking site is so easy to navigate. Enter the dates of travel and where you'd like to pick up the car (Keflavik airport or Reykjavik).

Then, you'll see lots of options for different cars and features. For Justin and I, we needed to rent a car with automatic transmission since neither of us can drive manual transmission. We also decided to rent a car that has four-wheel drive.

On the Discover Cars website, you'll be able to see which cars are 4x4. I always use a car rental comparison site to find the best vehicles at the best rates.

When you do rent a car, sometimes there is a mileage limit. You will definitely want to go with a high mileage or unlimited mileage when you rent a car in Iceland. You don't want to limit yourself to a set number of miles. Thankfully, every Iceland car rental I saw on the Discover Cars website noted that they had "unlimited mileage".

When you're narrowing down your choice of a rental vehicle, you may also decide to rent a car in Iceland with a local company. Lava Car Rental is one of the best local companies with years of experience, offering rental vehicles at Keflavik International Airport. Their vehicles include SCDW, theft protection and gravel protection, as well as 24/7 assistance and unlimited mileage. Lava Car Rental has received many awards and accolades as a reliable and trusted choice for your Iceland rental car.

What Type of Car Should I Rent in Iceland?

It's important to decide what type of car to rent. One of the biggest decisions is whether or not to rent a four wheel drive vehicle. Justin and I rented a 4WD Suzuki Jimny. We wanted to have the flexibility to drive off the Ring Road, so we opted for the four-wheel drive car. Depending on the season and where you plan on driving, you may or may not need a four wheel drive vehicle.

We traveled to Iceland in June. All of the roads were open as the weather conditions were ideal. If you're traveling during the spring, fall, or winter, be sure to check the road conditions before you head out. It's not even a bad idea to do in the summer!

As there weren't any treacherous road conditions and we didn't end up driving on any of the F-Roads, we likely didn't end up needing a 4WD car in the end. If you're going in the summer and sticking to the Ring Road mostly, you probably won't need a 4x4 car either. If you think you'll end up on any of the F-Roads, the best option is to rent that 4WD vehicle.

Renting a Car in Iceland: What are F-Roads?

F-Roads are the unpaved roads that lead to the highlands of Iceland. These roads are not paved, mostly contain loose gravel, and they can be challenging to navigate. You might need to drive across deep rivers in some cases! Driving on the F-Roads is only for confident drivers.

If you plan to drive on any F-Roads, it is a legal requirement to have a 4WD vehicle. These roads are also not always open and are usually only open in the summer months. In the winter, many of them close due to the high amounts of snow covering them. Then, they may not reopen in the spring if there's a lot of damage to the road. It's always a good idea to check in advance before planning your driving route.

Renting a Car in Iceland: What Kind of Insurance Should I Get?

Do you need extra insurance? Yes and no. First, look into the car insurance that's already offered through your credit card company. You might have good enough insurance already that you won't need to splurge on any extra insurance.

There are multiple kinds of coverage when renting a car in Iceland:

• Collision Damage Waiver (CDW)
• Super CDW (SCDW)
• Gravel Insurance
• Sand and Ash Protection Insurance (SAAP)

CDW is basic insurance that's usually always offered, which means that you'll pay a deductible if there's damage to the car. SCDW is a decreased deductible that's an improvement to the regular CDW.

You will want to consider the extra insurance for gravel damage. Even if you aren't driving on the F-Roads, many of the roads in Iceland are unpaved. This means that loose gravel will fly up at your car and your windshield. It's possible that these little rocks could dent the car, wreck the paint job, or crack the windshield. We got the gravel insurance.

Sand and ash protection insurance is a special kind of insurance that covers you against sandblasts in a wind storm. We didn't end up purchasing this insurance as there wasn't any stormy weather in the forecast.

While Justin and I didn't end up having any damage on our car, you just never know what could happen. We always opt for the extra insurance just in case. It's far better than being stuck with a giant bill at the end of the trip.

Some car rental companies will include the extra insurance as part of their deal. Be sure to look into this when comparing rates for the best and cheapest car rentals in Iceland.

Iceland Car Rental Tips: Keflavik Airport or Reykjavik?

When you fly into the Keflavik airport in Iceland, you can either pick up your rental car from the airport or from the Reykjavik city center. Justin and I spent two days/nights in Reykjavik before embarking on our road trip around Iceland.

We decided to take the airport transfer bus from the Keflavik airport to Reykjavik (book your transfer bus ticket here!). Then, we spent two days (and nights) in Reykjavik before embarking on our road trip. We knew that we wouldn't need a car in Reykjavik. You can walk everywhere. Reykjavik isn't very big!

This saved us the cost of having the rental car for an extra day when we weren't even going to be using it. Conversely, you can pick up the rental car from the Keflavik airport and embark on your road trip right away. It's possible to visit Reykjavik at the very end of your trip, too.

Picking up the Rental Car in Reykjavik

Justin and I stayed at the beautiful Old Charm Apartments in Reykjavik. We highly recommend booking your stay at this clean and comfortable apartment. It's within walking distance of everything in town.

After checking out from the apartment, a shuttle van from our Iceland car rental company picked us up from our apartment. I suppose that we could have walked to the car rental place, but we had all of our luggage. Most car rental companies will offer a free transfer shuttle so you can pick up your car.

The staff members were very friendly and helpful. They gave us a map, a card for a small discount on gas at certain gas stations, and tips about the must-see spots in Iceland. While we booked with our rental service using a credit card, it may be possible to use a debit card, depending on the agency.

We were warned that there are speed traps throughout Iceland. Be sure to always follow the speed limits as you don't want to receive a speeding ticket in the mail once you get home. Justin and I felt really well prepared as we got behind the wheel to begin our adventure.

Our Iceland Car Rental: Suzuki Jimny

The two of us rented a 4WD Suzuki Jimny. It has two front seats and ample room in the trunk for all of our belongings. We fit both of our suitcases, two backpacks of camera and drone equipment, a tripod, and our big supply of groceries. Don't rent this vehicle if you want to fit a family of four. You'll have to go for a car that's a little bit bigger.

The Suzuki Jimny is quite good on gas. As gas is expensive in Iceland and we drove a lot, we were very grateful to save some money. There's a spare tire in case you run into trouble on the road. The radio has a USB input, which didn't seem to work with Justin's iPhone, but it worked with my Android. It's always great to blast some road trip tunes.

Renting a Car in Iceland: More Important Tips

Renting a car in Iceland is such a good idea because you'll be able to stop wherever you want, whenever you want. If we saw something that looked interesting, we pulled over to take a look. If we decided to spend two hours at that one waterfall, we did it without any difficulty.

On many days, we reached our accommodation late at night because we were out exploring all day. In June, the sun doesn't go down until well after midnight (and even still, it never grows fully dark). This makes it easy to extend your adventures.

Renting a car in Iceland gave us the flexibility to make the trip exactly how we wanted it. You can drive around those mountain roads and explore on your own. Craft your travel plans however you like. Visit the off the beaten path hot springs, take advantage of the midnight sun in the summer or chase the northern lights in the winter.

After we spent two weeks in Iceland on an epic road trip, we learned quite a few things that will help you on your trip. Here are a few more details that you need to know before you embark on your Iceland road trip. For general information on driving in Iceland, please take a look at this guide by the Icelandic Transport Authority.

Drive With Your Headlights On

In Iceland, it is the law to drive with your headlights on at all times. We didn't think to turn the headlights on. After all, we're in the land of the midnight sun!

However, after every car started flashing their high beams at us, we realized something was up. After a quick Google search, we realized that we needed to turn our headlights on. So, we turned our lights on for the rest of the trip.

If we ever forgot, the first car that passed us reminded us as a courtesy. Without fail. Thanks for helping out these two naïve tourists, Icelanders!

Watch Out For Speed Traps

There are quite a few speed traps around Reykjavik, the Golden Circle Route, and the South of Iceland. Essentially, you'll find these speed traps in the most frequented areas of the country. These are mostly in the form of mobile cameras.

The speed limit on the Ring Road is usually 90km/h, and there are times where the speed lowers when you enter a town. You'll usually find the mobile speed cameras where the speed limit changes. There is often a blue sign posted with a picture of a camera on it, warning you of the upcoming speed camera. These are very unforgiving. If you're driving too fast, it will snap a photo of your license plate.

When you're renting a car in Iceland, you don't want to get an expensive speeding ticket. While you won't immediately know if you've received a speeding ticket, the ticket will be billed to your car rental agency. Then, they will bill your credit card directly. You really don't want to come home after a trip to receive a hefty fine on your credit card!

Get Fuel More Often Than You Think

Gas stations are more plentiful in towns and less common between towns. We had one time where we thought we were going to run out of gas! There weren't any gas stations for a long while in the direction we were driving. So, after an overnight stay, we had to backtrack almost 45 minutes to only gas station in the area!

You really don't want to run out of gas when you're in the middle of your Iceland road trip. It's always a good idea to be mindful of where the next gas stations are located. Many rental cars in Iceland come with their own GPS that show gas station locations.

I also suggest downloading an offline version of Google maps before you head out. It's quite common to lose cell signal when you're driving around Iceland. You don't want to end up wondering where the next gas station is located when you're low on fuel.

Don't Stop Randomly in the Middle of the Road

When renting a car in Iceland, some things are just common sense. Always pull safely to the side of the road if you're going to stop to take pictures. We actually saw tourists stopped in the middle of the road taking photos! There's usually enough room to safely stop on the shoulder without blocking any traffic.

While there certainly are areas of Iceland that have hardly any traffic (the Westfjords comes to mind), this still doesn't mean that it's okay to stop in the middle of the road. Another car can come along at any time. Justin and I had fun taking pictures in the middle of the road when there wasn't anyone else around, but we still parked our car away from the street itself.

Iceland Road Trip Driving Route

If you're renting a car in Iceland, it's possible to embark on an incredible road trip. We drove around the Ring Road in a counter-clockwise direction, with a detour to see the Westfjords. You can check out our complete Iceland 2 week itinerary plans and steal them for yourself.

One of my favorite things about Iceland was the changing scenery. You can drive around a bend in the road, and the view could be completely different. In one day, we could be driving next to lush mountains, barren volcanic rock, snowy mountains, and places that look like Mars. I share a complete listing of our Iceland blog posts at the bottom of this article if you'd like to plan out your entire journey using our guides as reference.

What to Pack on a Road Trip of Iceland

Make sure you check out our detailed road trip packing list so you know exactly what to bring to Iceland with you! Take note of the winter weather section should you plan your trip during the winter months.

We always love to have music in the car, lots of snacks, wet wipes, hand sanitizer, a small first aid kit, and toilet paper. We found that some of the restrooms didn't have any toilet paper, so it's always a good idea to pack some just in case.

Returning our Car Rental in Iceland

We arranged to drop off our rental car at the Keflavik airport on the way back. This meant that we didn't need to take the transfer bus from Reykjavik to the airport. Our rental car was almost brand new when we picked it up without any mileage on it. We managed to drive 3000km on it during our trip!

Some people opt to visit the Blue Lagoon before their flight home as a final farewell to the country. You can drive to the Blue Lagoon and then drive to the airport to drop off the rental car. We loved renting a car in Iceland and found it to be an easy and seamless experience.

Frequently Asked Questions for Renting a Car in Iceland

Have more questions about renting a car in Iceland? Here are the top frequently asked questions that you might have when it comes to Iceland car rentals in one convenient place.

What side of the road do they drive on in Iceland?

In Iceland, you drive on the right side of the road. It is easy to drive in Iceland if you're from Canada or the USA (or many other countries in the world that drive on the right!).

What is the minimum age to rent a car in Iceland?

You need to be 20 years old in order to rent a car in Iceland. To rent a 4x4 car, you must be 23 years old. Some car rental companies have different rules. For instance, at Lava Car Rental, you can rent a 4x4 car at age 20. Regardless of age, you'll need to have had your driver's license for at least one year to rent a car in Iceland. Some agencies will charge more money to rent a car if you're under the age of 25.

Do I need an international driving license to drive in Iceland?

If you're visiting from Canada, the USA, and most countries around the world that use the Roman alphabet, you won't need an international driver's license. The driver's license from your home country works just fine. If you come from a country where the national language does not use the Latin alphabet, you'll need to get an international driver's licence.

Are there extra fees to add an additional driver?

It depends on the car hire agency. Sometimes there are added fees if you want to add multiple drivers to the contract and sometimes there aren't. In our case, we only had one driver the entire time, so we didn't have to pay any extra fees. Some companies don't charge extra and some do. You can ask in advance or when you're picking up the car.

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