Driving is by far one of the best ways to see Iceland. The small country has a ring road which lets you access everything from Akureyri in the north to the Icelandic Highlands and the Westfjords. Self-drive tours are very popular but there are a few things to know before you go. The main questions we get regarding car rental in Iceland are what are the best car rental companies, how much does it cost to rent a car and how can I find a cheap car rental. We’ll address these questions and more in our Iceland car rental guide.

Knitted hat on rental car dashboard in Iceland


What are the best car rental companies in Iceland?

Iceland has a wide variety of car rental companies and agencies. You can choose from one of the major international players such as Hertz, Europcar, Thrifty, Budget, and others. Personally, we are big fans of buying local so to speak, so we recommend going through an Iceland-based car rental company such as Blue Car Rental or Lava Cars. You’ll most likely get better, more personalized attention than you would with a big multinational.

Icelanders also speak perfect English and are justly proud of their country, so they want you to have a good time. They will work quickly to resolve any problems that may arise with your rental. You can also look for cheap rentals by booking through third-party local sites such as Cars Iceland or Reykjavik Cars. Currently, the top-rated car rental companies on Google Reviews are Cars Iceland (200+ reviews), Reykjavik Cars (100+ reviews) and Iceland Car Rental (10+ reviews). You can also take a look at this breakdown of the best car rental companies from 2017.

Car rental sign


How much does it cost to rent a car in Iceland?

The cost of booking a rental car varies widely. Some factors to consider are the time of year, how far in advance you book, length of the rental, whether or not it’s a new or used car, whether the car is manual or automatic, and type of car (budget, mid-range, SUV, luxury, etc.) While it’s best to look at your specific dates and search criteria, in order to give you an idea of baseline prices, here are some rates that we found while searching car rental prices in Iceland for the summer.

Daily Rate: The lowest prices on the cheapest vehicles started around 45€ per day and usually hovered in the 50-80€ range.

Weekly Rate: The lowest prices on the cheapest vehicles started around 35€ per day and usually hovered in the 48-60€ range.

You can get a more comprehensive price breakdown here.

Blue compact SUV in Iceland at sunset

Please note that car rentals from Reykjavik airport started closer to 90€ per day.

In addition to the cost of renting a car, you’ll also want to spring for the insurance. Besides accidents, there are other factors to consider like sand and ash coverage, which may not be covered under standard car insurance. There are also the goats, horses and sheep on the road in Iceland (and let’s face it, you’re on their turf), so you can never be too sure.

Icelandic sheep sticking its tongue out

You should also factor in whether or not your car rental company charges for pickup. Not all of Reykjavik’s car rental companies are located at the Keflavik airport, and some of these charge for pickup. If you decide to go on your own it will add an additional 15-20€ each way to your transport budget. Just be sure to read the fine print when weighing the costs of renting a car for your trip to Iceland.

Tips for getting a cheap car rental in Iceland

As you can see, Iceland is expensive but we make no bones about that. Some money-saving tips we can offer are booking as far in advance as possible in order to get the best deals. Be on the lookout for coupon codes or special deals to get the lowest price on your car rental. Additionally, many people use tools like Skyscanner to find low-cost car rental in Iceland. And again, we have to stress…buy the insurance.

While it may seem counterintuitive if you are trying to save money during your trip, spending the extra dough on car insurance could be the best decision you make. Even if you if you are the best, most cautious driver in the world, anything could surprise you when dealing with unfamiliar conditions in an icy country. It’s always better to be safe than sorry and we don’t want anything to take the shine off of your amazing trip to Iceland!

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