Are you planning a trip to Iceland? Renting a car is one of the best ways to explore this beautiful country. In this blog post, we’ll share 13 essential tips for renting and driving a car in Iceland to make sure you have a safe, enjoyable, and unforgettable road trip.
1. Where to Rent a Car in Iceland – Which Company
To rent a car in Iceland, you can book with big international companies, local companies, or use car rental aggregators like DiscoverCars to compare the prices and book through them.
In the case of local companies, these were the ones I’ve heard good things about in several travel forums: Blue Car Rental, Lava Car Rental, and Geysir Car Rental. We went with Geysir Car Rental and everything went super smoothly, we absolutely recommend it.
If you prefer to go with a big international company, I always had good experiences with Sixt, Avis, and Alamo in other countries.
Sometimes you may find better deals using rental car aggregators like DiscoverCars or RentalCars. We have already booked using these websites on other trips without any problems. You can make a simulation here.
Tip: when you book a rental car through an aggregator, you have the option to purchase insurance through them rather than the rental company. This insurance is typically less expensive. If you damage the car, you may have to pay the rental company’s deposit upfront. Once the claim is processed, the aggregator insurance will reimburse you for that amount. Just remember to check the terms of coverage to ensure it meets your needs.
2. What Car to Rent in Iceland
The type of car you’ll rent will depend on the places you want to visit and the time of the year. You don’t need a 4×4 vehicle unless you’re going into the highlands.
The main road (Road Number 1) that goes around the island is a great road, and you can access the most popular places with a 2WD car.
However, during winter you might consider the 4×4 for peace of mind in case the conditions are bad. If you experience ice on the road, white-outs, strong winds, you’ll feel much safer in a bigger car. We rented a Mitsubishi Eclipse 4WD and we felt super safe on the road even with strong winds and some icy roads. We usually rent the cheapest car in our road trips, but in the case of Iceland, we felt safer with a bigger car.
Renting campervans is also quite popular in Iceland and it’s a great way to save money on accommodation. However, I don’t think renting a big RV/motorhome is a good idea due to Iceland’s strong winds. During our road trip, we saw two motorhomes flipped over at the side of the road.
3. Which Car Insurance
As I mentioned earlier, I prefer to travel with peace of mind. When it comes to car insurance I always choose to pay a little extra for Full Coverage on car rentals. Considering Iceland’s unpredictable weather and road conditions (in case of ice, blizzards, and other weather hazards), the risk of car damage is significantly higher compared to other countries.
Always take the Gravel Protection in your car rental. Many parking lots and the road to access them are unpaved. Additionally, Iceland’s strong winds can whip up gravel, even on paved roads.
The sand and ash damager waiver depends on the season of the year you’ll drive. It is recommended during March and April.
In all cases, consider the Super Collision Damage Waiver to lower your risk. It can be more expensive, but you’ll be travelling with peace of mind. I recommend this specially in Iceland, where a simple accident can cost you a lot.
4. You Don’t Need Wi-Fi on Your Car – Buy an eSIM
When renting your car, many companies will give you the option to add a Wi-Fi router to your car. In my opinion, buying an eSIM will be more practical and cheaper.
When travelling to foreign countries, we always opt for an eSIM to get internet data. We had good experiences with airalo, Maya, and Holafly. Check several providers to see which one offers the best package.
If you decide to go with airalo, you can use the referral code below on your first purchase to get a a 3$ credit:
SARA0837
5. Check the Car Rental Company Opening Hours
Always check the car rental company’s opening hours, especially if you’re arriving late. Many rental companies in Iceland offer an automated car key pick-up service, allowing you to collect your car even if you arrive late at night. However, confirm that the company you choose provides this option before making your booking if you’re arriving late.
6. Take Pictures of the Car
Before you start driving your rental car, always take photos of the vehicle, especially any damaged areas. This is important not just in Iceland but wherever you rent a car.
7. Fillinp-Up Your Tank
Most gas stations are self-service, so be prepared to fill up the tank yourself. When filling up your tank in Iceland, you can set a fixed amount, or go with the “Full Tank” option. The “Full Tank” option will temporarily hold a fixed amount on your card that will be higher than the cost of the fuel. Then, the remainder will be returned to your card later. We always had our money back a few minutes after fueling, but I read in some forums people complaining that it can take up to three days.
Many fuel stations in Iceland require credit or debit cards for payment. Cash is not widely accepted, and some stations may not accept foreign cards, so check with your bank beforehand to ensure your card will work. Additionally, you’ll need to type the card pin—make sure your card has a pin and that you remember it.
8. Gas Stations are Scarce
Gas stations can be sparse in remote areas, so it’s important to plan your fuel stops, especially in less populated regions. To avoid running out of fuel, fill up your tank when it gets half-full, especially if you see a gas station nearby.
9. Paying for Parking
Most parking areas in Iceland require payment. Many have booths where you can pay for parking, while some can only be paid for through an app.
I recommend downloading the Parka and EasyPark apps, which are commonly used in Iceland, and supported in most parking lots.
10. Always Check The Weather
Always check the weather and road conditions before setting out in Iceland, as weather can change rapidly. Weather warnings should be taken seriously and may require you to adjust your plans. For the most accurate weather updates, visit vedur.is, which provides forecasts for all regions.
To monitor road conditions and warnings, use the SafeTravel app or website. Roads are color-coded: green indicates clear and safe driving. You can also find information about closed roads and any active warnings.
11. Don’t Stop for Photos on the Road
During your road trip, you’ll see amazing landscapes and the beautiful Icelandic horses. Don’t stop at the side of the road to take pictures or to see the horses. Stopping in the middle or on the side of the road can create dangerous situations not only for you but also for other drivers.
Instead of pulling over, look for designated parking areas or viewpoints
12. Park Your Car Facing the Wind
Iceland is known for its strong winds. To prevent your car doors from being damaged when you open them, always park your vehicle facing into the wind.
13. More Quick Tips
Here are some more tips you should take into account:
- The car lights are required to be on at all times;
- Don’t speed, there are speed cameras almost everywhere. The maximum is 90 km/h on the main road (no.1);
- Stop for oncoming traffic at one-lane bridges: at single-lane bridges, the vehicle that arrives first has the right of way.
- Plan for shorter driving days as weather conditions can change rapidly and driving to your designed place might take much more than expected. Additionally, you’ll probably want to spend more time at scenic stops than initially planned.
More Iceland Travel Guides
We hope you found this guide for renting and driving a car in Iceland useful. You can use the buttons below to check car rental prices in Iceland:
If you’re planning a trip to Iceland check-out our other Iceland travel guides:
- Iceland Itinerary: Ultimate 7-Day Road Trip (includes Map)
- Iceland Golden Circle Self-Driving Itinerary (with Map)
- Iceland: Glacier and Ice Cave Tour—What to Expect
- Planning a Trip To Iceland: 25 Things You Should Know
- >> All our Iceland Travel Guides <<
Finally, you can use our links to book your accommodation, and activities and find cheap flights. You won’t pay more for it and you’ll be supporting our work.
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