Practical Information for Renting a Car in Iceland

The best way to reach all the beauty that Iceland offers is by renting a car. You simply cannot get to all the less touristy spots, or hidden gems of Iceland without your own transportation.  However, there’s lots to consider when renting a car in Iceland. We’re sharing ten things you need to know about making the most of your rental experience.


1. Rent Ahead of Time

Renting a car in Iceland in advance is always a good thing, and, if you’re heading to Iceland in the high season (June-August) it’s a must. Renting a car in advance has some major perks. Aside from the rental being cheaper, you’ll have more options for which car you rent, and typically get free airport pickup! The free airport pickup is a huge bonus as getting into Reykjavik can cost upwards of 20 USD!


2. Don’t Buy the Extra Insurance

Renting a car in Iceland brings on extra insurances you’ve never known existed. Think, sand and ash coverage. Ice/wind damage coverage. Gravel/window chip insurance – You get the picture… The extras go on and on!! It’s the law to have collision damage coverage on every rental, however, all the extras are up to the renter. Check your credit card to see if they offer rental car insurance coverage.  Most travel credit cards offer this free perk, and it will save you loads!

READ MORE : We 100% Love and Recommend This Travel Credit Card! It Will Save You Loads!


3. Avoid Renting a GPS by Downloading an Offline Map App

Having a GPS in a foreign country is so handy. However, renting a GPS is about an extra 10 USD a day, and that’s money you don’t need to spend. Download an offline map app – like – and avoid having to rent a GPS.

{Traveler’s Tip… If you want to know why we love, check out this post here. There’s even another free offline travel app we recommend in that post too!}

4. You Need a Gas Card… And It’s Expensive

If you don’t have a pin on your credit/debit card, you’ll need to purchase a gas card, put money on the gas card inside the station, then use that card to fill up the tank. Be forewarned here… Some gas stations aren’t open 24 hours a day, so you’ll definitely want to keep a gas card on hand if driving late at night!

Gas, diesel, petrol, fuel… Whatever you want to call it, it’s expensive in Iceland! We found the prices of gas/diesel to be at least double the price as the U.K.!! The only way to make this cost cheaper is by renting a car that takes diesel. You’ll more than likely get better gas mileage, and you’ll pay a bit less at the pump!


5. You Have to Pay to Park in Reykjavik

From what we’ve heard, parking in Reykjavik costs a pretty penny. Most hotels/accommodation don’t offer parking with your stay, so be sure to look into the parking situation before booking your accommodation. To learn more about parking in Reykjavik check out this post here.


6. Get Unlimited Miles

When renting a car in Iceland, the last thing you want to worry about is counting the miles you put on the car. Most rental agencies offer unlimited mileage, however, often times when you find agencies offering a special promotional deal, they’ll have a limit on how many free miles you get a day. Be sure that your car comes with the unlimited miles!


7. Snow/Winter Tires Are Required in the Winter

When we were researching renting a car in Iceland, we found only some agencies highlighted the fact that snow tires are included in the price. Don’t be fooled, if you’re renting a car in Iceland in the winter, by law, the car must come with winter tires. So don’t worry about if they’re included or not!

{Traveler’s Tip… Although winter tires must be provided by law, some of them are old. Check your tires before taking off. If there are studs missing, or the tread is worn out, ask for a car with better tires.}

8. 4 x 4s Aren’t Always Necessary

If you plan on staying on Highway 1 a.k.a. The Ring Road”, and/or doing the “Golden Circle”, you will not need to rent a 4×4. However, if you plan on driving in the highlands, or on any of the “F” roads, you’ll definitely need a 4×4. Plan out where you want to visit, then check this map to see if those roads are F roads or highland roads to see what rental car suits you best.


9. Manual is Cheaper. Always.

Seriously, either learn how to drive a manual or bring someone with you who knows how. Renting a car in Iceland can be more than double the price if you rent an automatic! If you can’t drive a manual, be sure to rent far in advance, as the automatics sell out fast!


10. The Freedom is Worth Every Penny

We’ve talked a lot about the price of rental cars, and have covered all the details you need to know to keep those prices down and choose the best rental car for you. We must say, although it can be expensive, the freedom of having your own car to explore Iceland on your own time is worth every penny. We’ve heard too many stories of people that did tours instead of renting their own cars and wished they had more time at places the stopped. Don’t let that be you! Be sure to make room for renting a car in Iceland within your budget.

{Traveler’s Tip… If you’re traveling solo, stay at a hostel and try to meet other solo travelers, then rent a car with them! We ran into a group of four people renting a van together who had just met at a hostel in Reykjavik the day before! If you can rent with someone else, you’ll be able to cut the cost!}



We’re so stoked for you to be heading to Iceland. Check out our other Iceland travel tips on our Iceland page, or leave a comment here and we’ll be sure to get back to you with more travel tips and advice! Have so much fun exploring the beautiful country of Iceland!



Here’s an idea of what renting a car in Iceland in the winter looks like…


Save this post for the next time you’re in Iceland by pinning either of these pictures here!

Become a part of the ArboursAbroad Family! Receive our newsletter along with freebies (like our budget guide) straight to your inbox!
Here's where we tell you your email address will not be sold or shared with anyone else... but seriously, who does that anyways? Don't worry about a thing 🙂

5 thoughts on “Practical Information for Renting a Car in Iceland

Leave a Reply

%d bloggers like this: