Iceland Car Rental Tips: 13 Suggestions For 2024 Rentals

Embarking on an Icelandic adventure is an exciting prospect, and one of the best ways to explore this unique and diverse landscape is by renting a car. Driving in Iceland offers the freedom and flexibility to discover hidden gems at your own pace. In this guide, we provide essential Iceland car rental tips for a seamless experience in 2024.

Whether you’re navigating the dramatic fjords in the Westfjords, chasing waterfalls along the South Coast, or exploring the bustling city of Reykjavik, this guide is designed to equip you with everything you need to know to rent a car in Iceland.

Understand the Rental Market in Iceland

Iceland’s rental market is robust and competitive, with numerous companies to choose from. You’ll find international brands like Enterprise, Hertz, Avis, and Budget, as well as local firms such as Blue Car Rental and Procar. Each has its strengths and specialities. Larger international companies often have a wider selection of vehicles, including luxury brands, while local companies can offer competitive prices and personalized service.

To make the most of the options available, it’s crucial to do your homework. Research various rental companies, compare prices, and read customer reviews. Pay attention to the terms and conditions, particularly in areas like mileage limits and insurance options. The cheapest deal might not always be the best, especially if it comes with restrictions that don’t suit your travel plans.

In recent years, peer-to-peer car rental services, akin to Airbnb for cars, have also gained popularity in Iceland. Platforms like Northbound or GoCampers allow you to rent directly from car owners, offering an alternative to traditional car rental companies. These platforms can offer a wider range of car types, from standard sedans to converted camper vans, enabling a unique travel experience tailored to your preferences and budget.

Choose The Right Car for Your Adventures

Selecting the right car is one of the most critical Iceland car rental tips. Your choice will depend on a variety of factors including your itinerary, the time of year, and your comfort level with different types of vehicles.

If you’re planning on sticking to the main roads and exploring cities and towns, a standard 2WD (two-wheel drive) car will suffice. These vehicles are perfect for driving on the well-maintained Ring Road (Route 1) that circles the island.

However, if you’re visiting in the winter or planning to explore Iceland’s interior Highlands, a 4WD (four-wheel drive) might be a better choice. These vehicles are designed to handle rough terrain and icy conditions. They also have higher ground clearance, allowing them to navigate the ‘F-Roads’ that lead to Iceland’s more remote and rugged landscapes.

If you’re planning a trip that embraces the outdoor lifestyle – perhaps camping or surfing – consider renting a campervan. These vehicles offer a place to sleep and basic kitchen facilities, providing an all-in-one transport and accommodation solution.

When choosing a vehicle, also consider factors like fuel efficiency, luggage space, and whether you prefer manual or automatic transmission. Remember, comfort and safety should be your top priorities.

Car rental insurance in Iceland can be confusing due to different types of coverage, so it’s essential to understand what’s included in your rental agreement.

Standard insurance, typically known as Collision Damage Waiver (CDW), is usually included in Icelandic car rentals. This covers damages to your vehicle in case of an accident, but it comes with an excess or deductible, which is the amount you’ll need to pay out-of-pocket before the insurance covers the rest.

However, the CDW doesn’t cover everything. For instance, damages to tires, headlights, windscreen, undercarriage, or caused by sand and ash, gravel, or driving off-road are usually not included. For these, you’ll need additional coverages like Gravel Protection (GP), Sand and Ash Protection (SAAP), and Super Collision Damage Waiver (SCDW) which lowers the deductible of the CDW.

It’s crucial to read the fine print and understand what each type of insurance covers. Consider the potential risks based on your planned itinerary and driving conditions. Sometimes, paying a bit extra for additional insurance can provide peace of mind and protect you from costly repair bills.

When considering insurance, also check whether your credit card company provides rental car insurance as part of their service, as this could help you save on insurance costs. However, make sure to verify whether their coverage meets the unique requirements of driving in Iceland.

Picking Up Your Rental Car

One of the essential Iceland car rental tips involves the process of picking up your vehicle. It’s not as simple as just taking the keys and hitting the road; you need to be diligent and thorough during this stage.

Start by inspecting the car thoroughly, both inside and outside. Take note of any scratches, dents, or damages, and make sure they are documented on the rental agreement to avoid being held responsible for them later. Don’t forget to check the tires for wear and tear, and ensure the spare tire and necessary tools are in the trunk.

Make sure you understand how to operate the car’s controls, including headlights, windshield wipers, heating system, and emergency brake. If the car has features that you’re not familiar with, such as 4WD settings, ask the rental staff to explain them.

Confirm what type of fuel the car takes and how to open the fuel cap. Misfuelling is a common, but costly mistake that can easily be avoided.

Before leaving the rental agency, clarify what you should do in case of an emergency or breakdown. Most agencies provide roadside assistance, but it’s good to know the procedure.

Getting There Via Keflavik Airport

If you’ve arranged to pick up your rental car from Keflavik International Airport upon arrival, you’ll find that the process is fairly straightforward. Once you’ve collected your luggage and passed through customs, follow the signs to the car rental shuttle buses.

The rental car companies’ service counters are not located within the main terminal building itself. Instead, they are housed in a separate facility known as the Car Rental Centre, which is a short distance away. Complimentary shuttle buses are available to take you there. These buses are operated by the car rental companies themselves and they depart frequently from just outside the terminal building.

You’ll find clear signs directing you to the shuttle bus departure area as soon as you exit customs. The journey to the Car Rental Centre is short, usually taking about 5-10 minutes, and the shuttle buses operate around the clock in line with flight schedules.

Once you arrive at the Car Rental Centre, you’ll find all the rental companies’ service counters. Make sure you have your booking confirmation, driving license, and credit card ready for the pick-up process. After completing the necessary paperwork, you’ll be guided to your car and can start your adventure in Iceland.

Tips and Tricks For Driving In Iceland

Iceland is known for its unique and often challenging driving conditions, so understanding what to expect on the road is crucial for a safe journey.

  • Iceland’s weather can change rapidly, bringing unexpected rain, wind, snow, or fog. Always check the weather forecast and road conditions before setting out each day. Websites like provide up-to-date information.
  • Speed limits in Iceland are lower than in many other countries: 50km/h in urban areas, 80km/h on gravel roads, and 90km/h on paved highways. Speeding fines can be steep, and speed cameras are prevalent, so stick to the limits.
  • Single-lane bridges and gravel roads are common, especially outside urban areas. Approach single-lane bridges with caution, yielding to the driver who arrives first, or to the one that is already crossing. On gravel roads, maintain a safe speed to avoid skidding or damaging the car with loose gravel.
  • In the countryside, be aware of free-roaming livestock that might wander onto the road. Give them plenty of space and slow down or stop if necessary.
  • Remember, off-road driving is illegal in Iceland to protect the fragile ecosystem. Always stick to marked roads and paths.
  • Icelandic law requires headlights to be on at all times, day and night. Seat belts must be worn by all passengers, and using a mobile phone while driving is prohibited unless hands-free.

By respecting these rules and driving with care, you can ensure a safe and enjoyable journey on your Iceland adventure.

Fuel and Maintenance for Your Rental Car

Another essential aspect of renting a car in Iceland involves fuel and maintenance.

Iceland’s petrol stations are self-service and operate on a pay-at-pump basis. Many of them are open 24 hours, but not all, especially in remote areas. Most petrol stations accept credit and debit cards. However, some pumps require a card with a pin. It’s always a good idea to have some cash as a backup.

Fuel is relatively expensive in Iceland compared to many other countries, so it’s worth considering the fuel efficiency of your rental car. Diesel is often cheaper and provides better mileage, which could save you money if you’re planning a lot of driving.

It’s recommended to keep the fuel tank at least half full at all times, as petrol stations can be few and far between in remote parts of the country.

As for maintenance, the rental agency is responsible for the general maintenance of the car, but you should keep an eye on the car’s condition. Check the oil and coolant levels if you’re renting the car for a long period or driving long distances. Report any issues to the rental agency immediately.

Regularly clean the car’s headlights and windshield, especially in winter when they can get dirty quickly, affecting visibility. Car wash facilities are available at most petrol stations.

5 Tips For Returning Your Rental Car

The process of returning the rental car is just as important as picking it up.

  1. Plan to return the car with a full tank of fuel unless the rental agency has a different policy. Filling up the tank near the return location just before you drop off the car can save you from potentially high refueling charges.
  2. Just like when you picked up the car, you should also inspect it when you return it. Take photos or a video of the car’s condition as proof. This could be helpful if there are any disputes about damage.
  3. Ensure the car is clean. While rental agencies expect some dirt from normal use, excessive dirt or mess could incur a cleaning fee. It’s especially important to remove any trash and personal belongings.
  4. Remember to return the car on time. Late returns can result in extra charges, often equivalent to an extra day’s rental. If you know you’re going to be late, call the rental agency as soon as possible.
  5. Check out with a staff member if possible, so they can confirm the car’s condition and that everything is in order. Keep a copy of the final rental agreement or any other paperwork for your records.

Returning the car correctly can prevent unexpected charges and make the end of your Iceland journey smooth and hassle-free.

What to Do in Case of an Accident

Despite our best efforts, accidents can happen. In such an event, it’s vital to know the correct steps to follow.

First, ensure the safety of everyone involved. Move out of the traffic if it’s safe to do so and use hazard lights to alert other drivers.

In Iceland, you must report all accidents to the police, especially if there are injuries. The emergency number in Iceland is 112, and there is also a 112 Iceland app that can send your location to the emergency services.

If it’s a minor accident with no injuries and the vehicles are drivable, it’s common to move the vehicles out of traffic after taking pictures of the accident scene. If the cars aren’t drivable, leave them where they are until the police or a tow truck arrives.

Document the accident. Take photos of the scene, the damage to the vehicles, and any relevant road conditions. This evidence can be vital when dealing with insurance.

Exchange information with the other driver involved in the accident. This includes names, contact information, license plate numbers, and insurance details.

Inform your rental company about the accident as soon as possible. They can advise on the next steps and how to handle insurance claims.

Lastly, don’t admit liability at the scene. That’s something for the insurance companies or police to decide based on the evidence.

The Role of GPS and Maps

In the age of digital navigation, GPS systems and maps play an essential role in Iceland car rentals.

Most rental cars in Iceland come equipped with GPS. They are particularly useful for navigating Iceland’s extensive road network, especially if you plan on driving in remote areas or taking scenic routes like the famous Ring Road.

GPS systems can help you plan your route, estimate travel times, and locate points of interest, petrol stations, accommodations, and restaurants. They can also alert you to speed cameras and give you a heads up about your speed, which is crucial as speeding fines in Iceland can be high.

However, don’t solely rely on GPS for navigation. It’s a good idea to have a backup, such as a physical map or an offline map on your phone, in case of technical issues with the GPS or if you’re in an area with weak signal.

Offline maps can be downloaded on various apps. They provide detailed road maps, hiking trails, and more, even without internet connectivity. They also help save on data usage if you’re using a local or international data plan.

Maps also offer a broader view of the area, making it easier to see alternative routes or nearby points of interest that you might want to explore.

Remember, it’s illegal and dangerous to use a phone or GPS while driving in Iceland. If you need to check your route, find a safe place to pull over first. Stay safe and enjoy your journey!

Driving in Reykjavik vs The Countryside

Navigating the streets of Reykjavik and the open roads of the Icelandic countryside presents distinct experiences, each with its own set of challenges and rewards.

Driving in Reykjavik, like any city, requires an understanding of local traffic laws, parking regulations, and rush hour times. The city has numerous one-way streets, so keep an eye on street signs. Parking in downtown Reykjavik is usually paid (except on Sundays), with several zones identified by different color codes indicating the cost per hour. Be sure to have some coins handy, although credit card payment is also possible.

Driving in the countryside is a different story. The scenery is breathtakingly beautiful, with roads that wind through vast landscapes, along dramatic coastlines, and past magnificent waterfalls and volcanoes. However, rural roads can be narrow, winding, and sometimes unpaved, so be ready for gravel roads. Note that F-Roads are only accessible with a 4×4 vehicle.

Weather conditions can change rapidly in the countryside, from clear skies to fog, rain, or even snow, affecting road conditions and visibility. Always check the weather and road conditions before setting out for the day.

Regardless of where you’re driving, remember to follow speed limits, wear seat belts, and never drive under the influence. In Iceland, headlights must be on at all times, day and night, in the city and the countryside.

6 Tips for Long Drives Through Iceland

Embarking on long drives in Iceland can be one of the most rewarding experiences, but it’s important to prepare adequately. Here are some tips:

  • Plan Your Route: Knowing where you’re going and the stops along the way can help manage time efficiently and avoid unnecessary backtracking.
  • Take Breaks: While it may be tempting to push on to the next destination, regular breaks are crucial on long drives to rest, stretch your legs, and maintain focus.
  • Pack Snacks and Drinks: Have water and snacks on hand to keep you hydrated and energized during the drive. Some parts of the Icelandic countryside are remote, with considerable distances between service stations or shops.
  • Fuel Up: Don’t let your fuel level drop too low. Fuel stations can be sparse in rural areas, so it’s a good idea to fill up the tank whenever you have the opportunity.
  • Prepare for All Weathers: As previously mentioned, the weather in Iceland can be unpredictable. Pack suitable clothing, sunglasses for the bright sun, and perhaps a blanket just in case.
  • Bring Entertainment: If you’re traveling with others, bring along some entertainment like music, podcasts, or audiobooks to make the drive more enjoyable.

Lastly, take your time and enjoy the journey. The beauty of driving in Iceland is the freedom to explore at your own pace, taking in the stunning scenery and making unforgettable memories. Safe travels!

Off Roading in a Rental Car in Iceland

Off-roading, or driving outside of marked roads or tracks, is strictly forbidden in Iceland due to the country’s delicate and fragile nature. The ecosystem in Iceland is very sensitive, and the slightest human interference can cause significant and potentially irreversible damage. Therefore, respect for nature is of utmost importance.

Off-roading can lead to large fines and even prosecution. Stick to marked roads and tracks and respect any closed-road signs or barriers. If you want to explore more remote locations, Iceland offers a network of F-roads, or mountain roads, usually open from June to September, depending on weather conditions. These roads lead to some of the more off-the-beaten-path locations in the country’s interior but require a 4×4 vehicle to traverse.

Remember, the primary principle in Iceland is to leave no trace. Preserve the natural beauty for generations to come by respecting the rules and staying on the roads.

Final Thoughts on Iceland Car Rental Tips

Renting and driving a car in Iceland provides the flexibility and freedom to explore this beautiful island at your own pace. This guide aims to help you navigate the rental process, prepare you for driving conditions, and provide tips to ensure your journey is as enjoyable and safe as possible. From understanding insurance to preparing for long drives, every aspect of your road trip is crucial to create unforgettable memories.

Iceland’s majestic landscapes, from its stunning waterfalls to its geysers and volcanoes, are waiting for you. Rent a car, hit the road, and prepare to be amazed at every turn. Happy travels and safe driving!

Leave a Comment