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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’ve rented a car in Iceland, exploring the southern bit of the country, and have learned firsthand what it is like to rent a car in Iceland, and ways to save money when doing so.
And we’re not into keeping those kinds of things secret. We’re all about experiencing travel and then sharing tips on making your travels to those same locations easier!
In this post, we’re sharing ten things you need to know about making the most of your rental experience — all things we’ve learned from renting a car in Iceland and other places around the globe.
Planning a Trip to Iceland?
When renting a car in Iceland (which we highly recommend), these are the first things to sort out ahead of time.
🚗 Compare and book your rental car with free cancellation
🏨 Browse the best places to stay in Iceland
🎟️ See top-rated Iceland tours & day trips
📶 Get an eSIM for reliable data while driving
10 Tips For Renting A Car In Iceland
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!
We use Discover Cars to book our car rentals. With their free cancellation policy, booking ahead of time can be done without worrying about your plans changing!
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. Before buying extra insurance, we checked our travel credit card benefits and found it already covered rental cars—saving us a significant amount.
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!
Don’t have a credit card. We have had our Chase Sapphire Preferred card for over 10 years, have had to use it’s warranties and extra credit card coverage more times than we can count, and can fully recommend signing up with Chase for your first credit card. See if you’re approved (and earn bonus points) here.
READ MORE | Why 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.
Purchase an eSIM before you land, and have wifi from the moment the wheels hit the ground. Alternatively, download an offline map app – like maps.me – and avoid having to rent a GPS.
Traveler’s Tip… If you want to know why we love map.me, 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!
At unmanned gas stations in Iceland, you will have to use a gas card or have a card with a PIN. Set up a PIN on your credit card before leaving for Iceland, or purchase a gas card so you can ensure you won’t be stranded!
After our super stressful experience at an unmanned gas station in a snow storm — getting a gas card may be our best tip of this entire post!
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
When we visited Iceland, our main goal was to get out and explore the countryside. With that goal in mind, we didn’t even take the time to go into Reykjavik, so we can’t speak to the parking from personal experience.
From what we’ve heard, parking in Reykjavik costs a pretty penny. Most hotels/accommodations 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.
💡 Planning Your Iceland Road Trip?
If you’re mapping out your route, these are the things we always book first.
🚗 Rental car (prices go up fast in Iceland)
🏨 Hotels along your route
🎟️ Tours for hard-to-reach places
Getting these locked in early makes your trip way less stressful.
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.
Often, when you find agencies offering a special promotional deal, they’ll have a limit on how many free miles you get per day. Be sure that your car comes with 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 whether 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.
Need a 4 x 4? Browse 4×4 options here.
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 who did tours instead of renting their own cars and wished they had more time at places they 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!
Here’s an idea of what renting a car in Iceland in the winter looks like…
Planning a Trip to Iceland?
After having our rental car in Iceland, even in the middle of a massive blizzard where driving seemed more than sketchy at times, we can confidently say that having a rental car in Iceland was one of the best decisions we made during our trip! Be sure to include a rental car in your Iceland budget, you won’t be disappointed!
Other things to sort out ahead of time…
🏨 Browse the best places to stay in Iceland
🎟️ See top-rated Iceland tours & day trips
📶 Get an eSIM for reliable data while driving
Save this post for the next time you’re in Iceland
