Iceland is made up of 107 towns and cities all with rich history and intriguing scenery, but as a tourist visiting for the first time, how do you know what cities to visit for the best experience during your trip? As Icelandians, we’ve experienced many of the beautiful cities ourselves and have compiled a list of the 9 best cities to visit in Iceland, as well as some fun facts about these cities and how to reach them by car. And we are even throwing in some tips about the best car rental services in Iceland to make it easy for you.

Related links: Rent a high-quality car in Iceland; See Hertz Iceland 13 rental car stations

the iconic sunset view in Iceland

Table of content

Fun Facts about cities and towns in Iceland 

There are 107 cities and towns in Iceland, but they are all very small when you compare them to other cities in Europe. The capital, Reykjavik, is the largest city in the country. It has a population of around 125 thousand people, which makes up almost 64% of Iceland’s entire population. In sharp contrast, the town of Kleppjárnsreykir is inhabited by only 43 people making it Iceland’s least populated town. 

Both towns have one thing in common however, they both do not have a single branch of the fast-food franchise McDonald’s. In fact, there are no McDonald’s outlets in any city in the whole of Iceland. The locals prefer the local Icelandic cuisine, such as that served in the yearly Viking Festival held in Hafnarfjörður during the summer.

visit Reykjavik by foot

Top 9 + main cities and towns in Iceland Map

What car should you rent if you want to visit cities and towns in Iceland?

When touring Iceland’s cities, you will most likely need to rent a car to help you get around. In fact, renting a car is highly recommended to give you the flexibility to see the cities and towns that you want, at a pace that works for you. You’ll need to know which cars to rent to make your trip most pleasurable, and there are a few factors to consider when making that choice.

  • First and perhaps most importantly, the weather at the time you decide to visit should be taken into account as it could affect other aspects of your journey, such as road accessibility. Weather in the summer can be navigated with a smaller car, while the winter weather can be snowy and unpredictable and requires a 4×4 car regardless of what road you take.
  • The number of people in your traveling group also determines what type of car you should rent. If you have a smaller group of 2-3 people, then an economy or compact car would be suitable for you. Larger groups might require intermediate-sized or 4×4 cars.
  • If you are carrying large luggage with you on your trip, then you will need a larger vehicle like a 4×4 or a full-size truck to help you haul your luggage. 
  • Some areas are hard to reach regardless of season as they are located on unpaved roads. Places that predominantly have dirt roads and mountainous roads will require more sturdy cars to get through the terrain. If they are on F-roads then you are legally required to drive a 4WD vehicle. For other areas that have easily accessible roads, a smaller car would suffice during the summer months. 

For more tips on where and how you can get rental cars in Iceland, you can read more on the Hertz Iceland car rental blog.

rental car for your Iceland road trip

The biggest city in Iceland: Reykjavik

Reykjavik is the capital of Iceland and the biggest city in Iceland

Famous for being the world’s northernmost capital, Reykjavik is a tourist hotspot in Iceland. It’s home to some of Iceland’s most popular hot springs, and you can also take a boat to see puffins from Reykjavik’s Old Harbour. It’s also the biggest city in Iceland and you may even be able to see the northern lights if you visit in the winter. 

The many attractions in the capital of Iceland mean that you can never run out of things to do when there. From puffin watching to hot spring hopping and sightseeing, you will never be bored in Reykjavik.

Best time to visit: Reykjavik can be visited at any time in the year as there will always be something to do. As it’s the biggest city, the roads are all paved and easily accessible year-round. 

How to visit Reykjavik by car?

When visiting Reykjavik, you can use a small car throughout most of the year. However, during the winter months, you might find a 4×4 more suitable to drive in. 

Route: Reykjavik is the capital and is easy to reach from the airport as it is only a 45-minute drive from the airport through Route 41. 
To find more things to do in the city, check out our complete guide on what to do in Reykjavik.

2. Well-known town in the South: Vík í Mýrdal 

summer is the lupin season of Iceland

Vík í Mýrdal (also called Vik) is a city on the southern coast of Iceland that is inhabited by only 300 people. It’s home to two famous waterfalls, the Skógafoss and Seljalandsfoss, which are some of Iceland’s most popular attractions. The village is also a stone’s throw away from the Dyrhólaey cliffs which are a haven for Icelandic wildlife. The Reynisfjara black sand beach, one of Iceland’s most popular attractions, is also only a short distance from Vik.

Best time to visit: Vik can be visited at any time of the year as it’s located on the Ring Road, so it’s fully paved and easy to get to from Reykjavik. 

How to visit Vík by car?

When visiting Vik, you can use a small car in most seasons. However, during the winter months, you might find a 4×4 more suitable to drive in. 
Route: Reaching Vik is very straightforward as it’s located on the Ring Road when driving south from Reykjavik. It is two and a half hours and 110 miles (187 km) from the capital.

3. The Lobster town: Höfn

rent a car and visit vestrahorn mountaiin

Also located on the end of the South Coast and the beginning of East  Iceland is the harbour town of Höfn, where the second-largest glacier in Europe called the Vatnajökull is located. Höfn is also home to the Vatnajökull Nature Park which is a vast land of beautiful sights. It’s also close to the Jökulsárlón Glacier Lagoon where you can visit the crystal blue ice cave and Diamond Beach, another of Iceland’s iconic beaches. When there you can partake in the Lobster Festival and enjoy Höfn’s unique culinary cultures. 

Best time to visit: Hofn can be visited at any time of the year without fear of losing out on any major experiences. 

How to visit Höfn by car?

When visiting Höfn, you can use a small car in most seasons. However, during the winter months, you might find a 4×4 more suitable to drive in. 

Route: You can reach Höfn by driving Route 1 Ring Road. It’s about 284 miles (458km) from Reykjavik which takes about 6 hours, and you will pass through Vik on the way. You take the Ring Road south out of Reykjavik basically the entire way and then exit onto Route 99 on the south coast. 

4. A beautiful town located in the East Fjord: Seyðisfjörður

A beautiful town located in the East Fjord: Seyðisfjörður

Seyðisfjörður is a village in East Iceland known for its fishing colonies and brilliantly colored houses. It is home to the popular Seyðisfjörður Blue Church, one of Iceland’s most recognizable features. It’s also an access point to other Scandinavian countries like Norway and Denmark through a ferry. In Seyðisfjörður you can go hiking and take in the beautiful scenery of the town or visit The Technical Museum. 

Best time to visit: As long as roads are accessible, Seyðisfjörður is great to visit even in the winter. However, the summer months are the best time to visit.

How to visit Seyðisfjörður by car?

In the summer months, you can visit Seyðisfjörður with a smaller car, but during the winter season, a 4×4 is highly recommended for touring the city. 

Route: Seyðisfjörður is an eight to nine-hour drive from the capital Reykjavik driving north on the Ring Road. You will take the Ring Road the entire way and exit onto Route 93.

5. The Biggest city in East Iceland: Egilsstaðir

The Biggest city in East Iceland: Egilsstaðir
Photo by flicker user/Fabio Achilli

Egilsstaðir is a town located on the banks of the Lagarfljót river in Eastern Iceland. It’s known as the de-facto capital of East Iceland. The Studlagil canyon is a major attraction in the city and makes up just a small part of the scenic town of Egilsstaðir which features beautiful mountains and waterfalls. In addition to enjoying the sights, tourists can also visit the Skriduklaustur museum of ancient ruins.

Best time to visit: Egilsstaðir is open to visits throughout the year, but it’s best to visit during the summer. If you decide to visit during winter, then it is best to plan for a long trip with several stops to accommodate the long journey to reach the city. 

How to visit Egilsstaðir by car?

Regardless of weather and season, the best car to visit Egilsstaðir would be the 4×4 SUV. As the route is quite long you don’t want to get stuck so far out of Reykjavik in bad weather conditions with a 2WD vehicle. 

Route: Egilsstaðir is located eight hours from the capital Reykjavik, and can be reached by driving north on the Ring Road the entire way, as Route 1 passes right through Egilsstaðir.

6. The capital of the North: Akureyri

Akureyri is the capital of north Iceland

Located in the North-East of Iceland, Akureyri is the capital of the North and makes up part of one of the largest Fjords in the country. It’s the second-largest city in Iceland with a population of 18,500. While in Akureyri, you can enjoy the beautiful scenery of the town which includes amazing wildlife, brilliant waterfalls, and the famous Akureyri church. You can also visit one of its famous spas with beer baths. It’s also a good place to go skiing. 

Best time to visit: Akureyri is open to visits throughout the year, but it is best to visit during the summer. If you decide to visit during winter, then it is best to plan for a long trip to accommodate the long journey between the north and the south of Iceland. 

How to visit Akureyri by car?

Regardless of weather and season, the best car to visit Akureyri would be the 4×4 SUV as the weather in the north is the most unpredictable. 
Route: Akureyri is accessible via the Ring Road, and takes about five hours to reach from the capital during the summer months. It might take longer during winter due to the closure of some of the roads because of snow and wind. The Ring Road goes right through Akureyri, so you can take it straight out of Reykjavik and you’ll drive directly into it.

7. The Whale Watching Capital of Europe: Husavik

Husavik is the capital of whales in europe

Iceland has some amazing places to see wildlife, but few are as popular as Husavik. The city is located in the North of Iceland and is home to over a dozen species of whales, making it truly the whale watching capital of the country. It was the muse of the popular song from the Eurovision Movie and with good reason. A superb city where you can go whale watching or take tours of the locations that were featured in the 2020 movie “Eurovision”. 

Best time to visit: Although it is accessible in the winter months when the weather is favorable, the best time to visit is during the summer when the whales are passing through.

How to visit Husavik by car?

When visiting Husavik it’s always recommended to rent a 4X4 vehicle, regardless of the time of year. 

Route: Husavik is one hour east of Akureyri, and 480km from Reykjavik. It takes around five and a half hours to reach Husavik from Reykjavik. You drive north out of Reykjavik on the Ring Road and pass through Akureyri. After that, you will exit Route 1 and take Route 85 north until you reach Husavik.

8. The capital of Westfjords: Ísafjörður

Photo from westfjords.is

Located in the West of Iceland is Ísafjörður, the largest city in the area and the capital of the Westfjords. The population is around 3,200 people and is a picturesque town showcasing some of Iceland’s beautiful terrain and plant life. While here, you can visit Iceland’s oldest buildings and other historical artifacts in the Maritime Museum. 

Best time to visit: The best time to visit Ísafjörður is during the summer, since the Westfjords can be hard to access during the winter and roads may be closed due to bad weather conditions. 

How to visit Ísafjörður by car?

You should always rent a 4X4 SUV when visiting Ísafjörður. The drive is long and non-linear, so it’s important to be comfortable and safe, which a 4X4 SUV will give you. 

Route: The journey to Ísafjörður should be broken down across a few days. This is because it could take as many as 10 hours from the capital depending on the time of year and road conditions. You will take Route 1 north out of Reykjavik and exit onto Route 60 just past Bifrost. You’ll then exit onto Route 61 which is a windy road that will take you the rest of the way to Ísafjörður.

9. The ‘Walter Mitty’ town: Stykkishólmur

The ‘Walter Mitty’ town: Stykkishólmur

Stykkishólmur is most famously known for its commitment to green energy, as well as being one of the locations featured in the movie ‘The Secret Life of Walter Mitty’. It’s a stunning fishing village with simple, yet breathtaking scenery. While in Stykkishólmur, you can take tours to Flatey Island which is a bird-watchers paradise. Other places to visit include the Stykkishólmur volcano museum, the Kirkjufell Church Mountain, and the Kirkjufellsfoss waterfall.

Best time to visit: Although it is accessible in the winter months, the best time to visit is during the summer as it’s located off the Ring Road. 

How to visit Stykkishólmur by car?

Since you’ll have to drive off the well-paved Ring Road it’s best to rent a 4X4 vehicle when visiting Stykkishólmur
Route: Stykkishólmur is located close to Snæfellsnes and is roughly two hours and 172km from the capital city Reykjavik. You’ll drive north on Route 1 out of Reykjavik and exit onto Route 54 at Borgarnes. Then you’ll veer off onto Route 56 which will take you the rest of the way.

List of all cities and towns in Iceland if you want something else

These aren’t all the possible places we can recommend for you to visit when in Iceland. There are more stops, but some are further from the capital and require special preparation. These remote ‘hidden’ villages are a bit harder to reach, but still very worth it. But they are still very accessible, as long as you rent a suitable car for your itinerary.

  1. Reykjavík
  2. Kópavogur
  3. Hafnarfjörður
  4. Akureyri
  5. Reykjanesbær
  6. Garðabær
  7. Mosfellsbær
  8. Selfoss
  9. Akranes
  10. Seltjarnarnes
  11. Vestmannaeyjar
  12. Grindavík
  13. Ísafjörður
  14. Álftanes
  15. Sauðárkrókur
  16. Hveragerði
  17. Egilsstaðir
  18. Húsavík
  19. Borgarnes
  20. Sandgerði
  21. Höfn
  22. Þorlákshöfn
  23. Garður
  24. Neskaupstaður
  25. Dalvík
  26. Reyðarfjörður
  27. Siglufjörður
  28. Vogar
  29. Stykkishólmur
  30. Eskifjörður
  31. Ólafsvík
  32. Hvolsvöllur
  33. Bolungarvík
  34. Hella
  35. Grundarfjörður
  36. Blönduós
  37. Ólafsfjörður
  38. Fáskrúðsfjörður
  39. Patreksfjörður
  40. Seyðisfjörður
  41. Grundarhverfi
  42. Hvammstangi
  43. Stokkseyri
  44. Eyrarbakki
  45. Vopnafjörður
  46. Skagaströnd
  47. Flúðir
  48. Vík
  49. Fellabær
  50. Hellissandur
  51. Djúpivogur
  52. Þórshöfn
  53. Svalbarðseyri
  54. Hólmavík
  55. Grenivík
  56. Hvanneyri
  57. Þingeyri
  58. Búðardalur
  59. Reykholt
  60. Hrafnagil
  61. Suðureyri
  62. Tálknafjörður
  63. Bíldudalur
  64. Mosfellsdalur
  65. Hnífsdalur
  66. Reykjahlíð
  67. Laugarvatn
  68. Raufarhöfn
  69. Stöðvarfjörður
  70. Bifröst
  71. Flateyri
  72. Kirkjubæjarklaustur
  73. Súðavík
  74. Hrísey
  75. Hofsós
  76. Breiðdalsvík
  77. Rif
  78. Reykhólar
  79. Varmahlíð
  80. Kópasker
  81. Laugarás
  82. Borg
  83. Hauganes
  84. Hafnir
  85. Laugar
  86. Melahverfi
  87. Tjarnabyggð
  88. Árskógssandur
  89. Lónsbakki
  90. Hólar
  91. Nesjahverfi
  92. Sólheimar
  93. Brúnahlíð
  94. Drangsnes
  95. Borgarfjörður eystri
  96. Árbæjarhverfi
  97. Brautarholt
  98. Rauðalækur
  99. Bakkafjörður
  100. Innnes
  101. Grímsey
  102. Þykkvabær
  103. Laugarbakki
  104. Reykholt
  105. Árnes
  106. Kristnes
  107. Kleppjárnsreykir
Iceland flatey island

Top cities in Iceland to visit with your rental car 

These nine cities are the pride of Iceland with iconic scenery and exciting activities to make your holiday in Iceland one to remember. From the suburban life in the capital, to the great mountains of Akureyri, there is something for everyone. If you would like more help choosing your cities and planning your itinerary in Iceland, do not hesitate to contact us via email hertz@hertz.is where you are also certain to get the best deals on car rentals in the whole of Iceland.

Book your car in Iceland now with Hertz Iceland

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