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Renting a Car in Iceland: What You Need to Know for an Iceland Road Trip

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.

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It’s possible to take some forms of public transit and coach bus tours, these are extremely limited. You will be limiting yourself to visit only a few places that are the most popular. Renting a car in Iceland is the best choice. You have complete freedom to drive anywhere you want, anytime you want, entirely on your own schedule.

Renting a car in Iceland

In this article, we’re going to show you everything you need to know about renting a car in Iceland. This includes:

  • Where to rent a car in Iceland and how to find the best prices
  • Whether or not you need a 4×4 car in Iceland
  • The Ring Road vs gravel roads vs F-Roads (What’s the difference?)
  • Whether or not you need extra car insurance
  • Where to rent your car (from the Keflavik airport or Reykjavik)
  • Important safety tips and practical tips for planning your Iceland road trip

How to Rent a Car in Iceland

Renting a car in Iceland - Renting a car in Iceland

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. 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 4×4.

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”.

Do I Need a Car That’s 4WD?

Road trip in Iceland - The Ring Road

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 vehicle. 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 4×4 car either.

What are F-Roads?

F-Roads are the 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. 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.

Do I Need Extra Insurance?

Driving in Iceland - Renting a car in Iceland

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.

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.

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.

Iceland Car Rental Tips: Keflavik Airport or Reykjavik?

Reykjavik City View

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

Go Car Rental and Campers Iceland

Justin and I stayed at the beautiful Opal 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. We were warned that there are speed traps throughout Iceland. Justin and I felt really well prepared as we got behind the wheel to begin our adventure.

Our Iceland Car Rental: Suzuki Jimny

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.

Suzuki Jimny - Iceland car rental
Suzuki Jimny - Iceland car rental

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

Little cottage in Iceland - Renting a car in Iceland

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. Here are a few more things you need to know before you embark on your Iceland road trip.

Drive With Your Headlights On

Driving in Iceland - Renting a car in Iceland

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

Eastfjords road trip - Renting a car in Iceland

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. 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

Getting gas in Iceland at a gas station

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. It’s also a good idea to stay connected by renting a portable Wi-Fi device. That way, you’ll have Wi-Fi access during your time in Iceland.

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.

Middle of the road photos in the Westfjords Iceland
Middle of the road photos in the Westfjords Iceland

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

Iceland roads from above

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.

We loved visiting the Golden Circle, the South of Iceland, the Eastfjords and Seydisfjordur, the Myvatn region, Akureyri, Husavik, Hvammstangi, the Westfjords, and the Snaefellsnes Peninsula.

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

Iceland car rental

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.

Where to Stay in Reykjavik

Opal Apartments Reykjavik

Justin and I stayed overnight at the bright and spacious Opal Apartments in the middle of it all. From our apartment, we walked all over town with ease. It was our home away from home with a comfortable bedroom, elegantly designed living space, and modern kitchen.

Opal Apartments Reykjavik
Opal Apartments Reykjavik

We cooked meals here, relaxed, and even enjoyed a little time on the private balcony. We highly recommend staying at Opal Apartments! Book your stay here.

If you’d like to see some more options for hotels and other accommodations in Reykjavik, please use this handy booking tool below. You’ll see everything on a useful map. Compare prices and click on each property to learn more and book your stay.

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Raheel Khan

Saturday 31st of August 2019

Rent a car is one of the best business in the whole world. It helps many People to travel who don't have car. Quality of a car must be good that attract the people. I've also love to travel in the world . I had book many times and experienced good with the services. Thanks for sharing this type of article.

Aaron Jenkins

Monday 8th of July 2019

A well-detailed article, thanks for sharing this one.

Jill Troughton

Saturday 14th of April 2018

If you are planning to camping then there's no better place in the world than Iceland. This country is famous and very popular choice for many travelers for camping because around 170 registered campsites in iceland and it starts from June to September. This country is the ideal for long trip camper camping holiday with a wide variety of popular attractions. Fantastic Landscap with perfect nature lights.


Saturday 29th of October 2016

What an adventure! Great post! xo Loren //


Thursday 21st of July 2016

Was your Ontario drivers license valid in Iceland or do you have an International license? Thanks!


Thursday 21st of July 2016

We used our Ontario driver's licenses! No need for an international one.

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