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A Comprehensive Guide to Everything Related to Renting a Car in Iceland.

So, you’re heading to Iceland and you want to rent a car. This would typically mean heading off to google and typing in something like “car rental Iceland” and you get all these nice listings, everyone claiming to be the cheapest and it’s pretty tempting to click that ad at the top that says it’s got cheap, reliable cars. BUT, you want to be absolutely certain you’re making the right choice, so you head off to TripAdvisor and take a look at some of the forum reviews. Even better would be starting with TripAdvisor and just glancing around the forum to see which car rental is mentioned most often in a positive way. Either way, you’re gonna wind up looking at reviews unless you’re making a blind booking (which you should NEVER do).

Booking a rental car without looking at reviews is like shopping bananas from the discount bin at the grocery store. You’re either gonna get lucky or you’re gonna get a bad banana. But, looking at reviews isn’t the only research you should do before you hire that car. This article is meant to guide you through the entire process of renting a car in Iceland, and to help you make the right choice for your Icelandic holiday.

Table of Contents

Use the links below to navigate quickly to a topic you have in mind.

Read the Reviews

Some rentals have a bad reputation, most of the time that's not without reason. People are usually very vocal about what went wrong if they had a terrible experience so reading reviews first hand is a great way to get a glimpse of what it's like to rent from that particular supplier.

You might google "Reviews for Car Rentals in Iceland", but that doesn't take you further than a forum post in TripAdvisor. With unverified users and no way of knowing if the car rental itself is submitting these reviews themselves under false names.

That's why we send each and every one of our travelers a personalized email asking them to please share their experience using Northbound and the Car Rental they booked from.

So far we have thousands of reviews that are all verified Iceland travelers. Click the link below to read over them.

Car Rental Reviews in Iceland

Rental cars in Iceland are cheaper online

The upkeep for the average website is pretty low, so naturally, companies prefer you to purchase their products on their websites to keep their staff and operating costs as low as possible.

To encourage people to actually go online companies stick a, often considerably, lower price-tag on the product if you purchase it electronically. Car rentals are no exception to this rule, and you should always look around online before you commit to booking at the desk.

Consider a pick up at KEF airport

The average price for a one-way ticket from Keflavík airport to Reykjavík city center is somewhere around 2.200 ISK which amounts to about 15 EUR per individual. We’re talking a direct route to the bus terminal in Reykjavík. If you want a ride straight to your hotel then the price goes a bit closer to 20 EUR. Pile that rate on a 4-person family and you’re up to 80 EUR after your first hour in Iceland.

Here’s the thing, a lot of the car rentals in Iceland have desks and even main offices in Keflavík, which means they offer, in most cases, free airport pickup and delivery. This is all part of the research process. See who has what included and you’ll be better off in the end.

Expensive fuel and where in Iceland to get it cheap

International oil prices keep plummeting and yet fuel prices in Iceland stay the same, perhaps dropping a few ISK per liter. If you’re planning to fill up the tank, it would serve you well to see which stations offer the best rates.

GSMBensin is a gloriously useful site to see which stations offer you the best rates and where they are located.

Huge price difference between certain dates

There are so many variables that count to the final price of your rental vehicle. Some agencies have 2 seasonal price categories, summer, and winter. Pretty simple, but this is only a small minority. A lot of the car rentals have five, six and even 20 seasons spread across the year. If you’re flexible regarding your dates then you should definitely take the time to experiment and see the prices that pop up.

There are also discount rules. For example, a rental might offer you 10% discount if you take 6-10 days, 15% discount if you take 11-15 days and a 20% discount if you take 16+ days. This, of course, is just an example but I have seen discounts go up to 42%. Some of the rental suppliers display the rules publically while others stuff it away in their terms and conditions.

Make sure you try out different dates and date lengths. Also, an extra hour usually costs you an entire day. For example, a 25-hour rental will charge as 2 days and 49 hours will charge as 3 days. Decide whether that extra hour is really worth it.

Freedom only a rental car can provide

If you’re the type of person that wants to have total control over your holiday then you might want to consider renting a car rather than boarding a bus. If you do your research you can easily find all the greatest attractions Iceland has to offer, and in your own time too. Exploring Route 1 and the outlying roads will open up a world of things to discover such as the varied attractions of the Golden Circle, the floating icebergs of Jökulsárlón, the stunning canyon of Fjaðrárgljúfur, vast black sands of Sólheimasandur and much more.

The south coast is particularly easy to explore, with plenty of detailed blogs dedicated to it to help you out, and holds nothing back in terms of awe and beauty.

Watch out for the Icelandic sheep

In a country where sheep outnumber humans 2:1 you bet your ass you need to keep your eyes peeled for the little critters. They roam around the ring road, unaware of safety protocols or crosswalks, and won't hesitate to stroll in front of your car. Keep your eyes open or you might end up wrecking your rental car in the least expected way... and ending the life of an innocent little sheep.

Never travel through Iceland without a spare tire

This is just good sense no matter where you are, but in Iceland, it is common sense. You can’t expect the roads to be paved everywhere you go, cause they aren’t. Make sure you go with a reputable rental that will provide you with a spare tire and a pair of jumper cables if the car is an old model. Most car rentals do provide a skinny spare or a repair kit that will at least get you to the nearest gas station.

Park against the wind

When parking, make sure, if you can, to face the wind with the front of the car. This will prevent the doors from flying open when you carelessly exit the vehicle. Damaged doors due to sudden winds are far too frequent and could get you into hot soup with your rental supplier.

Know your limits!

Along your travels, you’re bound to see yellow road signs with red borders that display a double-digit number in the center. Yeah, that’s the speed you should be driving at. In case you don’t see a sign and you’re unsure what the limit is, the usual rules are:

50 Km/h inside towns

30 Km/h in residential areas

80 Km/h on city three-lane roads

90 Km/h on highways if it is paved

80 Km/h on highways if there’s gravel, but in order to minimize damage to the car you should be driving at around 50 Km/h

Roads in Iceland regularly close

Iceland is an active island. There’s geothermal activity wherever you go, and this sometimes causes flooding or even full-scale volcanic eruptions. Be sure to check this page regularly to get instant updates on the conditions of the various roads around Iceland. Heavy snowfall, traffic accidents or even avalanches are also common occurrences and can put a huge dent in your schedule if you’re not prepared.

F-Roads: Be certain that you have the knowledge and know-how for highland driving

Highland driving in Iceland is not for everyone and should be done only by extremely capable and experienced drivers. Know what roads you are allowed to drive and properly evaluate whether your car is actually high enough, or allowed for that matter.

Just because a car is a 4x4 doesn’t mean that it is approved for highland driving by the car rental. Make sure you check with them before you book your car to make sure you’re covered by insurances if you take these routes. The various F-roads are also highly diverse and while some might be fine for your 4x4 another might be like driving across a canyon, so check to see which F-roads you are allowed to drive on.

The ring road is not fully paved

You heard me. Route 1, the main road around the country, is not fully paved. I can roughly estimate that perhaps 95% of the road is paved while the rest is gravel, so if you plan on going the whole way round then you should consider picking up that gravel protection insurance.

Illegal Off-Road Driving

Simply put, you shouldn't do it. But you might be one of those that need further encouragement and reasoning. During a large part of the year, the average Icelandic day is enveloped in darkness. So, you can understand why it takes many lifetimes for some types of vegetation to grow back to the state it was in before you tore it up.

Also, the Icelandic landscape is one of the most beautiful in the world. Do you think it would be as beautiful with tire tracks all over it? If this isn't enough to convince you, then I'm sure the 100.000 ISK(700 EUR) fine waiting for you will.

Gather information, like what you’re doing now (good job!)

Make sure to do your research and plan ahead. The longer and more adventurous your journey is gonna be the more you’re gonna have to plan it. You can use the links below to help you out.

Vedur.is - The Icelandic weather report.

- Safetravel.is - If an avalanche, storm, flood or any natural disaster happens then they will be one of the few to report it first. They also carry a lot of useful information to help you keep yourself safe and get back home after the holiday.

- If an avalanche, storm, flood or any natural disaster happens then they will be one of the few to report it first. They also carry a lot of useful information to help you keep yourself safe and get back home after the holiday. Road.is - The Icelandic Road and Coastal Administration . If you want to find out the condition of any road in Iceland, this is the place to check.

- . If you want to find out the condition of any road in Iceland, this is the place to check. GSMBensin.is - An independent website that publishes and regularly updates the prices for all of the major fuel companies in Iceland.

- An independent website that publishes and regularly updates the prices for all of the major fuel companies in Iceland. Northbound Rental Cars - A one stop shop to find, compare and book from a selection of hundreds of rental cars from all of the highest rated car rentals in Iceland.

Got a question burning in your mind that wasn't answered by this blog? Leave it in the comments below and I'll answer it and update the article.