Welcome to our complete guide to renting a car in Iceland! If you’re planning a trip to this beautiful land of fire and ice, renting a car is an excellent option for exploring its stunning landscapes independently.

In this guide, we’ll provide you with useful tips, information on recommended car types, where to rent them, requirements to consider, necessary insurances, and much more. Get ready to have an unforgettable experience in Iceland with the freedom to explore at your own pace.

Renting a Car in Iceland

Classification of car rental companies in Iceland

When renting a car in Iceland, it’s important to consider, in addition to price, the reputation and reviews of rental companies. Below, we present a ranking based on customer satisfaction, quality of service, and of course, price:

Cars Iceland – 🏆🏆🏆

Upon further investigation into Cars Iceland, we found excellent reviews for their customer service. We’ve also seen that it’s one of the companies that offers more comprehensive options in terms of insurance. They have a varied fleet to cover all needs with fairly new and modern cars.

IslandiaCar / Reykjavík Cars 🏆🏆

And now you might wonder why we’ve placed IslandiaCar and Reykjavík Cars on the same podium. Well, in the midst of our research, we discovered that IslandiaCar is the Spanish-language subsidiary of Reykjavík Cars. So if you’re intimidated by English (many of you have told me on the blog), I bring you good news: their agents will assist you in Spanish!

As you can see, both offer the same price and conditions. So if you’re scared of Shakespeare’s language, now you know where to turn using Cervantes’.

Reykjavík Auto 🏆

A younger company than the previous ones, but with a solid reputation and a fleet of modern vehicles, Reykjavík Auto is a reliable option for renting a car in Iceland at a good price and with good conditions. Their cars include CDW, SCDW, and TP insurances in the price, which we’ll tell you more about later.

Car Rental Companies in Iceland

Comparison of companies and prices

Next, we offer you a comparison of some car rental companies in Iceland, along with the approximate prices you can expect to find. Remember that prices may vary depending on the season and availability, so it’s advisable to check updated prices when making your reservation.

When conducting this study on renting a car in Iceland, we opted for local companies. There are many companies, so we’ve chosen the seven most well-known. The calculation is based on a hypothetical rental in July for 9 days (July 11-19, 2023). Which is already the high season in Iceland.

The type of car we’ve chosen for all is a 5-seat 2WD sedan. The study is for cars to be picked up at Keflavík airport.

Comparison Table of Car Rental Companies in Iceland:

CompanyApproximate price per day (in ISK)
Cars Iceland12,393 ISK | €82
IslandiaCar11,466 ISK | €75
Reykjavík Cars11,466 ISK | €75
Reykjavík Auto11,817 ISK | €78
Blue Car Rental13,286 ISK | €92
Go Car Rental13,932 ISK | €92.30
Nordic Car Rental12,672 ISK | €83

Before renting a vehicle, you should have a clear plan of your trip and needs; you’ll typically need 7 to 10 days to tour all of Iceland, which means you’ll spend a lot of time in the car, so it’s an important decision.

Don’t worry, this article will clarify all your doubts about renting a car in Iceland. So, what’s the best car rental company in Iceland? Where can we rent a cheap car in Iceland without compromising safety?

Where to rent a car in Iceland?

If you’re looking for options to rent a car in Iceland, there are two main centers where you can find numerous rental companies: Keflavik and Reykjavik.

  • In Keflavik, where Keflavik International Airport is located, you’ll find a wide selection of car rental companies. Many of them offer pick-up and drop-off services directly at the airport, which is convenient for those who want to start their adventure immediately.
  • In Reykjavik, the capital of Iceland, there are also several car rental options. Here you’ll find both international and local companies offering a wide range of vehicles to suit your needs.

What car should you rent in Iceland?

Renting a car in Iceland can be an unforgettable experience. The main advantage is “freedom”, as with a rental car, you can stop and see everything you want during your trip around Iceland. As an alternative to the car, there’s the bus, but in Iceland, there isn’t a good public transportation network (it’s very scarce and expensive), so we don’t recommend it.

But to make your trip truly unforgettable, you must know how to choose the right car for your adventure. It’s important then to consider various factors, such as your route and the season in which you’re traveling.

Car according to your route

Your choice when renting a car in Iceland will largely depend on the route you plan to take in Iceland. If your itinerary focuses mainly on the famous Ring Road, also known as the Ring Road, a standard two-wheel-drive (2WD) car will be sufficient. These cars are suitable for paved roads and will allow you to visit the main points of interest.

However, if you intend to explore the Highlands of Iceland or venture onto gravel roads or the famous Icelandic F roads, we recommend considering a four-wheel-drive (4WD) car. These vehicles offer greater stability and traction on more challenging terrains, giving you the possibility to access remote areas away from traditional tourist routes.

Car Rental Route in Iceland

Car According to the Season

Preferences when renting a car in Iceland are also greatly influenced by the season in which you plan to visit the country. During the winter months, especially from November to March, it’s important to consider the weather conditions and possible inclement weather.

In this case, a four-wheel-drive (4WD) car equipped with winter tires will be the best option. These tires provide better grip on slippery surfaces and will help you navigate snowy or icy roads more safely.

Remember to adapt your choice of car to your itinerary and expected weather conditions for a safe and enjoyable driving experience in Iceland.

Renting a Car in Iceland in Winter

Things to consider in your rental

When renting a car in Iceland, there are several important aspects to consider to ensure a seamless experience. Below, we provide relevant information about requirements, insurances, extras, gas stations, parking, and roads and speed limits in Iceland.

Requirements for renting a car

When renting a car in Iceland, you must meet certain requirements. Here’s a list of points to consider:

  • You must be over 21 years old to rent a car in Iceland. Some companies may require a minimum age of 23 or 25 depending on the model or type of car you choose.
  • A valid and current driving license is required. If you have a Spanish driving license, you shouldn’t have any problems renting a car in Iceland, nor will you need an international permit. Remember that you must have at least one year of driving experience; novice drivers cannot rent cars in Iceland.
  • Some companies may require a valid credit card to rent the vehicle in the name of the main driver for the security deposit. Make sure you have a credit card available with a sufficient limit to cover the deposit. If you don’t have a credit card, some companies accept the option of a debit card plus extra insurance.

Car Rental Permits in Iceland

Car Insurances

It’s essential to understand the different types of car insurance offered when renting in Iceland. Here are some common terms related to insurances:

  • CDW (Collision Damage Waiver): This is basic accident insurance that limits your financial liability in case of damage to the rented vehicle. Note that there’s usually a deductible you must pay in case of damage.
  • SCDW (Super Collision Damage Waiver): This is an additional option to further reduce your financial liability in case of vehicle damage. With this insurance, the deductible from the previous CDW is reduced, depending on the company, sometimes even halved.
  • GP (Gravel Protection): This insurance covers damages caused by stones and gravel that may jump and damage the windshield, bodywork, or other parts of the car.
  • TP (Theft Protection): Provides coverage in case of theft or attempted theft of the vehicle. In Iceland, it’s not really necessary, but it doesn’t hurt.
  • SAAP (Sand and Ash Protection): This insurance covers you in case of damage caused by sandstorms and volcanic ash, which, although it sounds like a movie, are quite common in Iceland.
  • Premium insurance package: Some rental companies offer a package that combines several insurances into one, providing you with more comprehensive coverage and reducing your liability in case of damage or theft. Many of the companies we researched even offered insurance without a deductible, a highly recommended option when renting a car in Iceland.

Needless to say, it’s important to carefully read the terms and conditions of the insurances offered by each rental company before making a decision. 

Car Rental Insurances in Iceland


When renting a car in Iceland, you can add optional extras to enhance your travel experience. Some common extras include:

  • GPS: If you don’t have a navigation device, you can rent a GPS to help you navigate Icelandic roads.
  • Baby seats: If you’re traveling to Iceland with young children, you can rent baby seats to ensure their safety and comfort during the journey. If you prefer to bring your own, here’s the guide on baby car seats in Iceland.
  • Roof racks: If you need additional luggage space, you can opt for a roof rack or roof box.
  • Additional driver: If you plan to share driving duties, you can add an additional driver to the rental agreement. This allows you to alternate driving shifts and rest during long journeys.
  • Winter tires: If you’re traveling to Iceland in winter, these tires are necessary to ensure better traction and safety in slippery road conditions. Most companies we consulted include them by default, but it’s always best to check if the company you’ve chosen also does.
  • Portable Wi-Fi: Some rental companies offer the option to rent a portable Wi-Fi device, allowing you to stay connected to the internet while on the move in Iceland.

Extras when renting a car in Iceland

Tips for Driving in Iceland

Driving in Iceland can be an exciting and unique experience, but it’s also important to consider some driving tips and rules. Here are some key points to consider:

Respect speed limits and traffic signs

Iceland has speed limits set on roads, which vary depending on the type of road and conditions. It’s essential to respect the speed limits in Iceland and pay attention to traffic signs to ensure your safety and avoid fines.

Drive with caution 

It’s basic to understand that driving in Iceland is a unique experience and different from your country. Weather conditions in Iceland can change rapidly, especially during the winter months. Always check the status of roads before heading out on your route.

Responsible parking

When parking your car, make sure to do so in designated areas and follow local regulations. Avoid blocking access, roads, or protected natural areas. If you plan to hike or explore remote areas, make sure to park in safe locations and don’t obstruct the passage of other vehicles.

Plan stops at gas stations

Iceland is a vast country, and some remote areas may have a shortage of gas stations. It’s important to plan your stops and ensure you have enough fuel for your journey. Take advantage of opportunities to fill up the tank when you find a gas station and carry cash or credit cards, as not all gas stations in Iceland accept cash payments.

Gas Stations in Iceland

Respect nature and the environment

Iceland is known for its natural beauty and fragile environment. Make sure to respect nature and follow established guidelines. Don’t stray from marked paths or trails, avoid trespassing in restricted areas, and don’t damage local flora and fauna. Enjoy nature responsibly and sustainably.


Renting a car in Iceland opens up a world of possibilities for exploring this breathtaking country at your own pace. Whether you’re planning a road trip along the Ring Road, an adventure into the Highlands, or a winter excursion to witness the Northern Lights, having your own wheels gives you the freedom to create unforgettable memories.

Remember to choose a reputable car rental company that meets your needs, consider the type of car and insurance options carefully, and familiarize yourself with driving rules and conditions in Iceland. With proper preparation and a spirit of adventure, your Icelandic road trip is sure to be an experience you’ll never forget.

Safe travels and enjoy your journey through the land of fire and ice!