Renting a Car in Iceland: The Ultimate Guide
- Alanna Gabbett
- Dec 6, 2024
- 9 min read
Updated: Mar 25
Iceland's stunning landscapes and otherworldly scenery are best experienced by car. With the wind in your hair and the freedom to explore at your own pace, renting a car allows you to discover breathtaking waterfalls, dramatic coastlines, and hidden gems scattered across the island. Let’s dive into essential information about renting a car in Iceland, from driving ease to the best rental companies.
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Ease of Driving in Iceland
Driving in Iceland is not just a means to an end; it’s an adventure in itself. The roads are well-kept, and navigating the famous Ring Road (Route 1) that circles the country is straightforward for most travelers.
Keep in mind, though, that Iceland’s weather can be unpredictable. For example, in January, average temperatures can hover around -1°C (30°F), but sudden snowstorms can close roads.
Before hitting the road, check platforms like SafeTravel.is for real-time updates on weather and road conditions—which can make or break your journey.
Using a GPS or a reliable mapping application is highly recommended. While cell service is decent on main roads, it may drop in remote areas. Downloading offline maps can save you time and stress when you lose signal.
Roads to Travel On
Iceland’s primary thoroughfare, the Ring Road, spans about 1,332 kilometers (827 miles) and is the gateway to many attractions. It connects major sights and towns around the country.
Some popular routes include:
Golden Circle: A loop of about 300 kilometers (186 miles) that brings you to Þingvellir National Park, the famous Geysir geothermal area, and the awe-inspiring Gullfoss waterfall. Did you know that Gullfoss drops 32 meters (105 feet) in two stages, making it one of Iceland's most powerful waterfalls?
South Coast: A scenic drive that takes you past stunning waterfalls like Seljalandsfoss and Skógafoss. Skógafoss is 60 meters (197 feet) tall, and its mist often creates vibrant rainbows on sunny days. Along this route, you'll also find Reynisfjara, a black sand beach known for its unique basalt columns.
Snæfellsnes Peninsula: This area features diverse landscapes, from the majestic Snæfellsjökull volcano to charming fishing villages. It’s a smaller, yet equally stunning alternative to the Ring Road.
While the Ring Road is mostly accessible, interior roads or F-roads require a 4x4 vehicle due to challenging conditions. Always check if your rental car is suitable for such terrain. Keep in mind that F-roads are only open in the summer months, so you won’t be able to explore any of the highlands outside of June- August.
Rules and Regulations
Iceland has specific driving rules, including the following:
Seatbelts: Mandatory for all passengers.
Car seats: In Iceland, all children below 150cm in height are required to travel in car seats. The car seats in Iceland are required to be approved by the European rules, not US rules
Speed Limits: Usually 50 km/h in urban areas and 90 km/h on gravel roads.
Off-Road Restrictions: Driving outside marked paths is illegal and harmful to the environment. There is a pretty hefty fine for driving or walking on the flora here.
Tolls and Fees
There is only one toll road in all of Iceland and that is the Vaðlaheiðargöng tunnel. This tunnel connects the east bank of the Eyjafjörður fjord and Akureyri. it provides a much quicker route between Reykjavík and the Snæfellsnes Peninsula compared to the coastal road.
Fees:
Regular passenger car under 3.5 tons: 1,850 ISK per trip (one-way)
Vehicle weight between 3.5 to 7.5 tons: 2,800 ISK per trip (one-way)
Vehicle weight over 7.5 tons: 5,900 ISK per trip (one-way)
The fee is required to be paid in full within a 24 hours time frame with a valid credit card online. You can pay for your single tip via the veggjald.is website here or with their official app (Apple iOS; Android) after passing through the tunnel; OR, you can also pre-register your rental car’s license plate number details on the same website 24 hours before your trip and pre-pay the fee.
Parking Payments
Parking fees are another consideration, especially in Reykjavík and popular tourist areas. Fees can range from 200 ISK to 1,500 ISK ($1.50-$12 USD) per hour. Look for parking signs and pay attention to the rules. Some areas may use parking apps, while others may have pay stations.
Parking is typically managed through an app or nearby machines. It’s crucial to pay for parking; fines can exceed 10,000 ISK (approximately $75 USD) if you ignore the rules.
Common parking apps include EasyPark and Parka. They allow you to pay directly from your phone, making life easier in busy places. Always seek designated parking areas, especially near popular attractions, to avoid fines. In each parking lot, a sign will indicate parking fees and provide information on how to pay. Every tourist site we visited on the south coast used the parka app for parking so be sure to download this ahead of your trip.
Typical prices at the parking lots along the south coast are 1,000 ISK to 1,300 ISK and this is not hourly, but the price for the day (up until midnight).
Best Rental Companies in Iceland
Choosing a reliable rental company can significantly enhance your experience. Always check multiple companies before booking to make sure you get the best deal. Compare specific car models that meet your rental needs. Here are some top contenders:
Blue Car Rental: Praised for excellent customer service, they offer a mix of regular and 4x4 vehicles to fit your travel needs.
Note that the company Zero Car is owned by Blue Car Rental and they are essentially the same company. However, we did book through Zero Car directly as we got better rates this way. We loved that their rentals all included full insurance, and we were even able to find a discount code (provided to us by the Airbnb we booked).
Geysir Car Rental: Positioned conveniently at Keflavík Airport, this company provides a variety of vehicles and flexible rental plans.
Iceland Car Rental: This company is known for its reliability and 24/7 support, providing vehicles equipped for Iceland’s unique terrain. They have a selection of affordable rates and vehicles, making it a great option for budget-conscious travelers needing reliable transportation.
CampEasy: For those seeking a camper van experience, CampEasy offers fantastic options, allowing you to explore and have accommodations in one go. Keep in mind that wild camping is not legal in Iceland, and you’ll have to find an appropriate campsite.
Before finalizing your reservation, read customer reviews and check for any hidden costs. Confirm what's included in the insurance package and ensure the vehicle meets your travel plans.
If you plan on traveling F-roads, be sure to confirm this is allowed by the rental agency and that you book the appropriate car as most agencies have specific cars that are allowed to traverse these roads.
Importance of Insurance
Iceland’s unique environment calls for careful consideration of insurance when renting a car. Many companies offer packages tailored to address the country's distinct driving conditions.
Key insurance options to consider include:
Collision Damage Waiver (CDW): This coverage protects you from the costs of damages in case of an accident. While you may drive cautiously, you cannot guarantee that everyone else on the road will as well!
Gravel Protection: Many roads are unpaved, leading to stone chips and possible damage. This insurance can save you from hefty repair bills.
Sand and Ash Protection: If you plan to drive during volcanic activity, this is essential to guard against paint-scratching debris. With the recent surge in volcanic activity, this insurance is essential. The country is covered in volcanic ash from thousands of years of eruptions, making it inevitable that your car will come into contact with it in some form.
Theft Protection: Rental cars can sometimes be targeted, making this a prudent choice. Although not common in Iceland, it’s still important that your insurance covers this.
Assess your risk and match your insurance options to your travel plans to maintain peace of mind while exploring. Additionally, you should check your credit card company as some do offer rental car coverage.
Keep in mind that damage caused by neglect or misuse will almost never be covered by insurance. For example, every rental agency will inform you of the importance of being cautious when opening doors. Most rental cars even have a sign on the car doors indicating the importance of opening them with caution during high winds. Frequent high winds have been known to rip doors off cars, and this is typically not covered by insurance policies. We recommend always parking against the wind to limit your risk when opening car doors.
Helpful Tips for Renting a Car
Book in Advance: Especially during the high season, reserving a rental can save you money and guarantee availability. Many companies offer free cancellation so don’t worry if you need to alter dates or if your plans change.
Understand Fuel Policies: Familiarize yourself with your rental company's fuel policy. Some require you to return the car with a full tank, while others may offer a more convenient refill option for a fee. Always double-check your rental contact.
In addition, you should note the fuel level when picking up the vehicle in case it doesn’t reflect what is indicated in your contract. For example, if your contract indicates that you should receive the vehicle with a full tank and the tank is half-full on pickup, let the agency know. In most cases, they will make a note for you to return it the same way instead. Always take a time-stamped picture of the fuel gauge on pickup in case there are any discrepancies later.
Know Local Driving Laws: Iceland has strict laws regarding drinking and driving, with a 0.0% alcohol limit. Familiarize yourself with these regulations and make sure to never operate a vehicle with impaired cognitive function.
Keep Your Distance: Weather can change suddenly. Maintaining a safe distance from the vehicle ahead is essential for road safety. It’s important to note Iceland contains more sheep than people and it’s not uncommon for sheep, cows, and other animals to wander into the roads. You should be aware of frequent animal crossings and drive accordingly.
Emergency Kits: Ensure your rental car includes a spare tire, first aid kit, and other emergency supplies for peace of mind, especially when planning to drive in remote areas.
Practice Local Driving Etiquette: Respect speed limits, watch for wildlife, and be cautious on steep cliffs and winding roads. Don’t drive off-road, which is expressly forbidden, and make sure to take care to not step or drive on the lichen and local flora as these are protected by law, which can incur steep fines.
Paying at the Pump: Gas stations in Iceland are self-service and easy to use. Prices are pretty high, about 300 ISK per liter, which equates to almost 9 USD per gallon!
Be sure to take more than one card and carry a backup amount of cash in case your card doesn’t work. We noticed on our trip that our American credit cards didn’t work at some pumps and after reading posts from other travelers, others have had the same problem. Some stated that the card needed a pin and therefore a debit card did work. However, we don’t advise using a debit card overseas due to the added fees involved in the currency exchange.
Our advice is to place a pin on your credit card, which is easy to do through your credit card portal or by calling customer service. We placed pins on our credit cards and had no further issues with filling up at the pump.
Renting a car in Iceland unlocks a world of exploration and adventure. With the freedom to create your own itinerary, you will encounter beautiful landscapes that turn your trip into a memorable experience.
Equipped with practical information about driving conditions, popular routes, rental options, and essential insurance, you are ready to chart your journey through this magical island. Follow these tips, stay safe behind the wheel, and immerse yourself in Iceland's remarkable beauty.
Now, start planning your unforgettable road trip, where every twist and turn reveals something extraordinary!
Don't forget to check out our complete Iceland Travel Guide for more important information!
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