How to find a cheap car rental deal in Iceland
Looking for a cheap rental car in Iceland? The booking magic happens here. With prices starting at 41 € a day, we compare all the best deals so you can choose fast, spend less, and drive away happy.
For extended getaways, 287 € is the lowest available rate for a weekly rental.
Browse the car rentals in Iceland and trim your transport costs. It's the most affordable place in Iceland to book your ride.
Overall, the most popular city to rent a car in is Reykjavik.
If you're unsure which company to go with, check out Ice Rental 4x4. It's the first choice for many travellers in Iceland.
Collect your ride from the airport if you're flying in. Reykjavik Keflavik Airport, Reykjavik Domestic Airport and Akureyri Airport offer car rental pickup locations either at the terminal or close by.
You can easily rent some wheels in cities including Reykjavik, Akureyri, Egilsstadir, Isafjordur and Kópavogur.
Book a one-way rental and you could pay less. If a city is short on vehicles, providers often drop the price to encourage returns there. Select 'Return car to a different location' to find those cheaper routes.
Planning a multi-week rental? It could be cheaper to book a full month, so try different date combinations to find out what works best.
Pick a vehicle with a 'Fair fuel policy' and avoid additional fuel charges. It arrives with a full tank and goes back the same way, so you stay in control of what you spend.
Rentals with 'Unlimited mileage' give you freedom to roam without racking up added charges. Search for this option using the 'Policies' filter and travel freely.
Best time to book a car rental in Iceland
Here's your insider tip for booking at the right time. Four weeks in advance gives you the best chance at finding the best price on a car rental in Iceland.
The most affordable month to rent a car is November, with an average rate of 48 € a day.
August is typically the most expensive time of year.
Compare car rental types in Iceland
Economy: If you want reliable and affordable, economy fits the bill. With lower daily rates and engines designed for efficiency, this option helps keep both upfront and ongoing costs manageable.
Small: Including mini and economy classes, small cars are made for everyday travel. If you're looking for a cheap rental car in Iceland, this is where you'll find some of the best deals. They're perfect for city driving and quick trips, with easy handling, low fuel use, and enough space for the essentials.
Medium: Want more space without going all out? Medium rentals (which include compact and intermediate models) hit the sweet spot. They feel right at home on city streets, on highways and just about everywhere in between.
Large: Big adventures call for bigger thinking. Whether you're cruising with the whole crew or planning a long drive, these full-size cars bring the extra space you need. Expect generous seating, serious luggage capacity and comfort that goes the distance.
SUV: Road trips across Iceland are a breeze in one of these. The higher seating position offers a better view of what's ahead and helps you stay aware of your surroundings. Engineered for versatility, they can take you from busy urban streets to more challenging terrain without missing a beat.
Van: When there's plenty to pack in, a van delivers. This category of car for rent in Iceland handles people and cargo with ease. Including commercial vans and trucks, they're a dependable pick for group transport, moving or business use.
Luxury: Really want to level up? From sleek design to advanced features and strong performance, luxury vehicles kick the entire driving experience into high gear. This is what you book when you expect nothing less than exceptional.
Insurance and optional extras
Excess insurance helps cover the excess you're liable to pay if your rental car is damaged or stolen. While not mandatory, it's a safety net if something happens. Keep in mind that not all insurance policies are the same, so make sure you know exactly what's offered.
Take your ride to the next level with handy extras like a GPS unit and reverse camera. They can turn your drive into a smoother experience when you rent a car in Iceland.
Driving in Iceland: What you need to know
Generally, you have to be at least 21 years old to rent a car in Iceland. Being younger isn't always a deal-breaker — just expect some extra rules or charges. Check the suppliers' terms and conditions before you book.
Kids coming with you? Car seat regulations vary by location, and the best setup may depend on their height, age and weight. Check if you need to add one to your car rental reservation in Iceland.
You'll need to bring a few things when picking up your rental car: your physical driver's licence, extra photo ID, and a credit card to cover the deposit amount. Debit cards usually aren't accepted. Any additional requirements will be listed in your booking.
Driving in Iceland may take some getting used to if it's your first time. Don't forget all vehicles travel on the right side of the road.
Follow the local speed limits. Most of the time that's around 45kph in built-up areas and 85kph or so on highways, unless signs say otherwise.
In Iceland, the legal blood alcohol concentration (BAC) limit is 0.05%. If you're planning to have a drink or two, leave the driving to someone else or use public transport instead.
The Icelandic króna (ISK) is the currency you'll be using for day-to-day expenses and activities. Pay with a credit or debit card when it's convenient, but carry a little cash when electronic payments aren't available.
Where to road trip in Iceland?
Iceland is easy to explore by car, with major rental hubs in Reykjavik, Akureyri and Keflavik, plus airport pickup points at Keflavik International Airport and Reykjavik Domestic Airport. If you're planning car rental in Iceland, these routes show how different pickup points, trip lengths and vehicle types can shape your journey.
Nature and Adventure: The Ring Road, Iceland's South and East
Pick up your car in Reykjavik and head out along Iceland's main ring route toward the rugged south and east. It's a demanding but rewarding drive that suits travellers who are comfortable covering long daily distances between remote stops.
Recommended car: Large SUV or 4x4.
Suggested pickup point: Keflavik International Airport.
Good for: Adventure travellers, couples and photographers.
Road conditions: Paved highway, gravel sections, weather-exposed stretches.
Best time to go: June to August for passable conditions and long daylight.
Trip length: Seven to ten days.
Key stops: Skaftafell, Jökulsárlón.
History and Culture: The Reykjanes Peninsula and the Southwest
Start your drive from the capital and work your way through Iceland's most historically layered corner, where Viking-age sites and geothermal fields sit close to the oldest settled lowlands. This suits travellers who prefer shorter daily drives with plenty of time to stop and explore on foot.
Recommended car: Compact SUV.
Suggested pickup point: Reykjavik city centre.
Good for: History enthusiasts, first-time visitors and couples.
Road conditions: Paved roads, lava field tracks, some gravel.
Best time to go: May to September for accessible sites and mild weather.
Trip length: Three to five days.
Key stops: Þingvellir, Selfoss.
Wildlife and Coastal: The Snæfellsnes Peninsula and the West
Pick up your car in Reykjavik and drive northwest along the western coast toward one of Iceland's most wildlife-rich peninsulas, where seabird cliffs and seal-frequented shores line the route. It's well suited to travellers who want a compact, unhurried loop without committing to the full ring road.
Recommended car: Mid-size SUV.
Suggested pickup point: Reykjavik city centre.
Good for: Wildlife watchers, families and nature lovers.
Road conditions: Paved coastal roads, gravel mountain tracks, exposed headland stretches.
Best time to go: June to August for active seabird colonies and whale sightings.
Trip length: Four to six days.
Key stops: Stykkishólmur, Arnarstapi.
Weather and driving conditions in Iceland
Weather
Summer brings near-continuous daylight around June and July, while spring and fall see rapidly shifting day length and changeable weather. Winter runs from November through March, with very limited daylight, particularly in the north, and cold, overcast conditions across the island.
Snow and fog are the conditions you'll encounter most when driving in Iceland, with highland roads and mountain passes closing entirely during heavy snowfall, so always check road status before you set out. Fog rolls in quickly along coastal stretches and can cut visibility fast, so drop your speed and use low-beam headlights to stay visible to other drivers.
Driving conditions
Paved highways connect most of the coastline and make a road trip in Iceland straightforward for confident drivers, but once you head inland toward the highlands, the roads turn to gravel and require a four-wheel-drive vehicle. Many of those interior routes are only accessible to high-clearance 4WD cars, so check whether your rental covers them before you go.
Reykjavík is compact and relatively easy to navigate, but street parking is zoned and paid, and the one-way streets in the older parts of the city can catch you off guard on your first loop through. {NS} Outside the capital, signage is clear but sparse, and gas stations can be hours apart in remote areas. Many interior tracks are marked for high-clearance vehicles only, so check your rental category before heading inland.
Sheep roam freely across Iceland's rural roads throughout summer, often straying onto the pavement with little warning. Icelandic horses are also common near unfenced roads, so staying alert outside towns keeps things straightforward.
Complete your road trip with a hotel
No matter where your drive leads, a comfortable place to stay changes everything after a long day on the road. After booking your car rental in Iceland, explore hotels in Reykjavik if you're passing by this major stop. You can also compare Akureyri accommodation options or browse places to stay in Egilsstadir as you plan the rest of your route.
