Iceland is an incredible destination. There’s so much to see and do that we just keep going back, and it’s quickly becoming one of our favorite places in the world. Just think about it.

• 2024 and 2025 are a peak of the current solar cycle, making now the best time for a decade to go to a place like Iceland to see the northern lights.
• Recent geological activity has given volcano tourists an incredible experience, alongside the usual dormant volcanoes all around Iceland you can visit.
• Pristine glacial waters and a robust hydrological system mean Iceland is positively covered in incredible, gorgeous, and idyllic waterfalls you can visit.
• Geothermal vents near the surface naturally heat water in several places, and you can visit them as patrons of one of the two best hot spring spas in the country.

In fact, Iceland is a small enough country you can do all of the above in a single trip, as long as you have the time. Iceland as a whole is only about the size of Iowa, and the ring road that circles the country is about 825 miles long, depending on whether or not you take some of the side paths or go out of your way to visit certain destinations. You can visit pretty much anywhere you would like in just a few days of driving.

Of course, Iceland is an island country, so you can’t exactly drive out to it. While you could technically have your car shipped in or even flown in, that’s a terribly wasteful idea when there’s a much more effective option available to you: renting a car. At first glance, it can sound difficult to do, but it’s actually quite an easy process.

The Basics: How to Rent a Car in Iceland

One of the nice things about Iceland is that it’s extremely familiar with tourism and has many of the modern amenities you would expect when you travel. You don’t have to worry about the availability of services like car rentals, especially since you’ll be flying into a hub like Reykjavik in the first place.

Renting a car in Iceland is honestly quite easy. There are a bunch of different companies to choose from, including both international brands like Avis, and local Icelandic brands like Lava.

We recommend starting your search on a site like Guide to Iceland. Just pick a type of vehicle you want to rent (coupe or sedan, hatchback or SUV, luxury, van or camper, or motorhome/RV), and browse the options available to you. You can book directly through the site and time your rental to your trip, or you can scout out pricing and visit the rental sites directly, or even wait until you’re there and see what’s available.

In general, though, booking in advance is the easiest and smoothest option. If you wait, availability may be limited, but if you book ahead of time, the company you book with can make sure the vehicle you want is on hand when you arrive.

To actually rent a car in Iceland, all you really need is a valid driver’s license. You don’t need an international or Icelandic license either; your USA state license is generally enough. You also need to be old enough, but the minimum age is 20, so most international travelers will meet it.

If you rent a car ahead of time, you can give your rental company your flight number. That way, they can send a representative to meet you directly at the airport, so you don’t have to find a way to their offices to pick up your vehicle. They’ll usually have someone holding a sign, either with your name, your booking number, or the name of their company.

Once you’ve gone over the rules, signed your paperwork, and loaded your car, you’re good to go! From there, it’s just a matter of staying safe, driving well, and making sure to return your rental car in top condition with a full tank of gas.

How Much Does Renting a Car in Iceland Cost?

The actual price will depend on several factors.

• How long do you need the car? The longer you need it, the cheaper the per-day rate is likely to be, but the more it will cost in total.
• Do you want optional insurance? For example, you can add on insurance coverage for things like sand and gravel damage, or get full protection.
• Do you need accessories like a GPS service, a child seat, or a second driver on the rental list?

And, of course, the type of vehicle you want to rent will matter a lot.

Exploring Guide to Iceland, picking a random week a couple of months in advance, here are some base prices (without all the add-ons.)

• A small car like a Hyundai i10 starts at $168 for seven days.
• A Tesla Model 3 starts at $731 for a week.
• A Jeep Compass Trailhawk with a rooftop tent starts at $858 for a week.
• An older Renault Kangoo campervan starts at $520.
• A full-scale motorhome runs you more like $2,000 for the week.

So, this gives you an idea of the scale of pricing you’re looking at. If all you need is a car to take you around the ring road and from hotel to hotel, you can do it quite cheaply. If you’re looking for something more rugged that can climb and off-road to the more isolated destinations, you’ll need something in the middle ranges, and if you want something to act as your lodging as well as your transportation, you’re adding a zero to the end.

What Kind of Vehicle Should You Rent?

This is up to you, your budget, and where you intend to go.

Again, if all you’re doing is hanging out on the ring road and driving major streets between cities, a cheap sedan is all you really need.

On the other hand, if you want to drive on any of the F-roads – which are the mountainous roads that are unpaved, rugged, and will require some off-roading experience – then you’ll want a Jeep, 4×4, or other more rugged vehicle.

Camper vans can be great if you’re prepared for that kind of lifestyle. It’s a little less luxurious than staying in hotels throughout Iceland, but there’s something primally intense and near-life-changing about waking up in an isolated valley, without another human in miles, seeing the sun rise over the open land. Just, maybe reconsider if you’re going to visit in the winter.

Iceland Car Rental Tips and FAQs

What do you need to know to make your trip to Iceland easier? Let’s go through some of the more common questions and give you some of the tips we’ve picked up along the way.

Most, but not all, of the rental cars in Iceland are manual transmissions. If you don’t know how to drive a stick, make sure you’re getting a rental vehicle with an automatic transmission. It will probably cost a little more, but that’s the price you pay for convenience.

Tip: Ask about a gas discount card. Iceland’s gas prices are pretty steep, and if you’re driving a lot, fuel costs can add up. Some rental companies will offer a discount card that can get you gas at a cheaper rate, which can help you save some money.

Iceland’s roads can be treacherous. While the ring road and the other major roads are generally well maintained, other roads can be little more than a packed gravel path, and some of the F-roads are barely more than trail markers and tire tracks. There’s a reason why “gravel protection” is an add-on kind of insurance! If you aren’t comfortable driving on a given kind of road, consider hiring a driver instead. It’s more expensive, but it’s better than getting stuck.

Don’t skimp on the insurance. Unexpected damage, whether it’s from stray wildlife, gravel kicked up by a vehicle in front of you, high winds tossing debris into your car, or a mistake on your part, can happen at any time. You’ll be on the hook for expenses that aren’t covered by the insurance you purchase, and since it’s relatively cheap to get a full coverage package when you rent your car, it’s definitely worth doing.

Pay attention to warnings about road conditions. When Icelandic advisories say high winds, they mean it. Those winds can flip vehicles, especially ones with a higher center of gravity. Likewise, flood advisories and other warnings that mean a road is closed mean just that. It’s not “a couple of inches of water you can drive through”; it’s “if you try to drive across this, you will be swept out to sea.” Listen to the warnings.

Do you need a rental car in Iceland? That depends entirely on how much traveling you want to do. If you’re spending most of your time in one of the bigger cities, you can get around primarily with public transit and local taxi services just fine. Even taking a day trip out along the ring road can be done with a hired driver or an organized tour group. It’s only if you plan to drive a lot more or want independence and flexibility that renting a car makes more sense.

Tip: Keep the gas tank filled whenever you can. Fuel stations can be few and far between, so if you don’t top up when you have the opportunity, you can end up in a sticky situation. It can help to have a rough idea of the gas mileage of your rental vehicle and where the gas stations are along your route.

Things to know about driving in Iceland. Here are a few critical tips it can be handy to know.

• In Iceland, you drive on the right side of the road and the left side of the car. This is just like America, so you should be pretty familiar with it, but travelers from areas of Europe and other left-lane countries will need to adjust.
• Speeding is heavily punished. You’re not likely to be pulled over, but there are a ton of traffic cameras that monitor speeds and end tickets to the owner of the vehicle, which means the rental company will pass those right along to you. It’s also dangerous, of course, especially with all of the livestock and wild animals about.
• If you’re visiting during winter months, make sure you know how to drive on snow. Residents of northern states with plenty of experience will probably be fine; anyone from a southern area without that experience will have some trouble, possibly seriously. Don’t just assume you know how to handle it when your car completely loses traction!
• Learn the local laws. There are a lot of small rules that might not be obvious at first glance but which are quite important. For example, your headlights need to be on at all times, and there’s no “right on red” rule, so when a light is red, you’re not moving.

Just because you can, doesn’t mean you should. While we’ve mentioned off-roading a couple of times, what we really mean is the F-roads. True off-roading is both illegal and heavily discouraged because of the protected wildlife and plant life found all across the country, and because of the dangers of driving across unknown terrain.

Parking is generally free. Just about the only place where you have to pay to park is central Reykjavik, and even then, it’s a relatively small section of the city. Still, if you’re spending your time there, be sure to know where you can park for free and where you’ll need to pay a fee. Those fees range from about $1.30 to $2.50 per hour, so keep that in mind.

Have a great time seeing the sights! Iceland is an incredible destination with a ton to see and do, and it’s one of the most beautiful places on the planet. Having a car on hand gives you the freedom and flexibility to go wherever you like, whenever you like, and it’s definitely worth doing, especially if you’re stepping outside of the cities. Have at it, and tell us how your trip went when you get back!