Rental Requirements in Iceland: 2026 Essential

Before you hit the Ring Road, please review our mandatory rental requirements. Meeting these criteria ensures a seamless pickup at any of our 11 locations across Iceland.

1. Driver’s License & Identification

Do you need an International Driving Permit (IDP) to rent a car in Iceland?

No, provided your license contains English or Roman script information. If you hold a valid license from the US, Canada, EU/EEA, or many Asian countries printed with English details, you can rent directly from Hertz Iceland.

• Original Copy Mandatory: You must present your physical original license. Digital or virtual licenses are not accepted.
• Translation Requirement: If your license is not in English/Roman script, you must provide an International Driving Permit (IDP) or a notarized translation.
  • If your driving license is not categorised according to the IDP (International Driving Permit), for example, a driving license issued by the Hong Kong SAR government, you need an International driver’s license to drive and rent a car in Iceland.
• Special Categories (Type D): To rent a 10-seater vehicle (9 passengers + driver) or bigger van, a Type D license is required by Icelandic law.
• Experience: Drivers must have held their license for a minimum of one year at the time of rental.

Additional Driver / Operator (The “Extra Driver”)

To ensure all occupants are protected, any person intending to drive the vehicle must be registered on the rental agreement as an Extra Driver.

• The Main Driver: The person named on the reservation must be the primary driver, present at the time of pickup, and the payer of all rental charges.
• Adding an Extra Driver: You can add additional drivers for a small daily fee. This fee ensures that the second driver is legally covered under the same insurance terms as the main driver.
• Requirements: Every extra driver must meet the same License Requirements (held for 1+ year, English/IDP) and Minimum Age Requirements as the main driver.
  • The driving licence requirement applied to the main driver is also applied to the second driver.
• Insurance Warning: If an undeclared/unregistered person drives the vehicle and an accident occurs, all insurance and waivers are automatically invalidated, leaving the renter fully liable for all damages.

2. Iceland Car Rental Age Requirements

How old do you need to be to rent a car in Iceland?

Hertz Iceland has no maximum age limit for renting or driving. However, minimum age requirements apply based on the vehicle category selected for your 2026 trip.

Minimum Age by Vehicle Category

Vehicle Group	Minimum Age	Examples
Economy & Compact	20 Years Old	Toyota Yaris, VW Polo, Compact Wagons
Intermediate	20 Years Old	2 & 4-door Intermediate sedans/wagons
4×4 SUVs & Minivans	23 Years Old	Toyota Land Cruiser, Dacia Duster, Minibuses
Prestige & Luxury	25 Years Old	Select luxury models and high-performance cars

3. Payment Methods: Credit & Debit Card Policy

Do you need a credit card to rent a car in Iceland?

Yes. To rent with Hertz Iceland, a valid physical card in the main driver’s name is mandatory. This rule applies regardless of your booking source or reservation status.

Accepted Payment Methods

We accept the following physical cards for the security authorization hold (not a deposit) required at pickup:

Card Type	Requirements & Conditions
Credit Cards	Visa, Mastercard, American Express. H.C.C. cards (booked via Hertz.com) are also accepted.
Debit Cards	ONLY accepted if the card has a 16-digit number starting with 4 or 5.
Prepaid Credit Cards	Accepted only if in the main driver’s name with sufficient funds to cover all estimated charges.
Luxury Rentals	Two (2) Credit Cards must be presented at the time of rental.

❌ Strictly Not Accepted

To avoid rental refusal, please note that we cannot accept the following for security authorization:

• Mobile Wallets: Apple Pay, Google Pay, or e-wallets.
• Virtual Cards: Digital-only cards or non-physical banking apps.
• Apple Cards: Neither the physical titanium card nor the digital version.
• Cards not in the Main Driver’s Name: The name on the card must match the license.

Important Notes on Authorization & Payment

• Physical Card Mandatory: You must present the actual physical card at the rental desk.
• Authorization Hold: We do not take a “deposit.” Instead, we obtain an authorization hold on your card based on estimated rental charges. Ensure your card has a sufficient credit limit/balance before arrival.
• Final Payment Flexibility: While a physical card is required for pickup, you may opt to pay the final balance using other methods at the end of the rental, provided all terms and conditions are met.
• Online Reservations: Please be aware that online “Pay Now” reservations are charged immediately upon confirmation.

4. Coverage Packages & Protection in Iceland

Navigating Iceland’s unique terrain requires the right protection. Here is a breakdown of what is included and how you can upgrade your coverage.

What’s Included with Every Hertz Iceland Rental

Every vehicle includes two mandatory protections required by Icelandic law, built into your rental rate at no extra cost:

• Third-Party Liability Insurance (TPL): Covers claims from third parties for bodily injury or property damage caused by the rental vehicle. This is a legal requirement for all vehicles in Iceland.
• Collision Damage Waiver (CDW): Limits your financial responsibility if the car is damaged in a collision. You are only liable up to the excess amount (deductible) stated in your agreement, rather than the full cost of repairs.

Note: CDW and TPL provide basic protection but do not cover common Icelandic risks such as tires, windshields, undercarriage, or damage from gravel, sand, ash, and water. To have the risks covered, we recommend taking our: optional car rental coverage packages.

Optional Protection Packages

Hertz Iceland offers three levels of coverage packages. We recommend choosing a level that matches your itinerary, especially if you plan to drive the Ring Road or South Coast.

Package	Inclusions	Excess (Passenger)	Excess (4×4/Luxury)
Basic Cover	CDW + TPL	242,000 ISK	399,000 ISK
Medium Cover	Basic + SCDW, Theft (TP), Windshield (WP) & Headlights, Gravel (GP)	30,000 ISK	65,000 ISK
MAX Cover	All Inclusions + Sand & Ash (SAAP) + Tires & Wheels	Zero Excess	Zero Excess

Estimated Daily Rates:

• Passenger Cars: From 2,750 ISK/day (Basic) to 4,950 ISK/day (MAX).
• 4x4s & Luxury: From 3,850 ISK/day (Basic) to 5,950 ISK/day (MAX).

• Passenger Cars: from 2,750 ISK/day (Basic) to 4,950 ISK/day (MAX)
• 4×4 Jeeps, Minivans & Luxury Vehicles: from 3,850 ISK/day (Basic) to 5,950 ISK/day (MAX)

➡️  View Full 2026 Price List for Coverage & Extras

⚠️ Critical Safety & Liability Exclusions

Please be aware that certain risks are not covered by any coverage package in the Icelandic rental market. The renter remains 100% financially liable for:

• ✕ Underbody Damage: Any damage to the chassis, engine, or undercarriage of the vehicle.
• ✕ Water Damage: Damages resulting from river crossings or driving through deep water.
• ✕ Off-Road Driving: Driving outside of marked roads/tracks is illegal in Iceland and voids all protection.
• ✕ Traffic Violations: Any damage resulting from a violation of Icelandic traffic laws (e.g., speeding, illegal parking).

Use Your Own Insurance or Credit Card Coverage

Purchasing additional coverage from Hertz Iceland is not mandatory. You are free to:

• Rely on travel insurance from your own insurance provider
• Use rental car coverage provided by your credit card company
• Decline optional protection packages at the rental desk

5. Road Restrictions & 2026 Usage Tax

Driving in Iceland requires strict adherence to road classifications to ensure your protection remains valid.

F-Road & Highland Restrictions

• 2WD Vehicles: Strictly prohibited on all F-roads, Kjölur (Road 35), and Kaldidalur (Road 550).
• EV & PHEV 4×4 Models: Some electric and plug-in hybrid 4×4 vehicles are not allowed on F-roads due to battery positioning. Always check your specific vehicle description.
• Consequences: Ignoring these restrictions or driving off-road (which is illegal in Iceland) will void all insurance and waivers. The renter will be 100% responsible for all repair and recovery costs.

Icelandic Road Usage Tax (Kilometer Tax)

Effective January 1, 2026, Iceland has introduced a national road usage tax for all vehicles. When you rent with Hertz Iceland, the charge is calculated based on the actual distance driven during your rental period:

• Government Road Tax: 6.95 ISK per km
• Hertz Service Fee: 1.40 ISK per km (+ VAT)

Questions regarding Road Tax billing? If you have specific inquiries regarding the calculation of these fees or require further clarification on your rental statement, please contact our dedicated support team at: roadtax@hertz.is.

6. Rental Logistics: Pickup, Return & Fuel

• Airport Service Charge: A mandatory charge applies to all pickups at Keflavík International Airport (KEF).
• One-Way Rentals: You may return your vehicle to a different location for a One-Way Fee, subject to availability and vehicle type.
• Taxes display: All rates on hertz.is are subject to a Government value added tax (VAT) at 24% and are included in all our rates.
• Fuel Policy (Full-to-Full): Vehicles are provided with a full tank. Please return them full to avoid refueling and service charges.
• Return Locations: Cars must be returned to a designated Hertz location. Drop-offs at hotels are not permitted. If a car is left at a hotel, Hertz will charge for professional pickup and fuel.
• Opening Hours: Returns must occur during office hours. Please check our Stations & Locations page for current timing.

7. Fees, Fines & Cancellation Policy

Parking, Tunnels & Fines

The renter is responsible for all parking fees, tunnel tolls, and speeding tickets.

• Administrative Fee: If Hertz receives a notification for an unpaid fine or toll, your card will be charged for the fine PLUS an administrative processing fee.
• Learn more about Parking in Iceland here.

Cancellation Policy

• Prepaid Bookings: * 72+ Hours Notice: Full refund.
  • Less than 72 Hours / No Show: Non-refundable (Full price charged).
  • To cancel, email hertz@hertz.is with your name and reservation number.
• Pay on Arrival: Can be cancelled via our website (through View/Cancel booking button) anytime before the rental begins.

Vehicle Reservation Policy

How does the “or similar” car rental policy work in Iceland?

At Hertz Iceland, we provide a diverse fleet of modern vehicles. To ensure availability for all travelers, reservations are typically made by car category, though we offer exclusive Guaranteed Models for premium experiences.

Standard Reservations: The “Or Similar” Guarantee

For most bookings, your reservation is guaranteed by car category, not by a specific make or model. If the exact model shown (e.g., Toyota RAV4) is unavailable, we provide a similar vehicle within the same class.

Our “Or Similar” Commitment: When providing an alternative vehicle, we guarantee that the core specifications remain identical:

• Transmission: An automatic car will always be replaced with an automatic car.
• Drive System: If you book a 4×4 or AWD vehicle, you will receive a 4×4 or AWD vehicle.
• Capacity: The number of seats and doors will remain the same.
  • Note on Luggage: While we ensure the vehicle dimensions are equivalent, the exact trunk configuration and luggage capacity may vary slightly between different brands in the same class.

Exclusive: Guaranteed Luxury & Premium Models

If you require a specific driving experience, Hertz Iceland offers a selection of Guaranteed Models. When you book these specific vehicles, you are guaranteed to receive that exact make and model, not a “similar” alternative.

Our Current Guaranteed Fleet Includes:

• Luxury SUVs: BMW X3, BMW X5, Land Rover Defender 130, Land Rover Discovery Sport PHEV, Range Rover Sport PHEV
• F-Road Icons: Toyota Land Cruiser 250

8. Parking, Tunnels & Traffic Fines

Managing your road trip expenses in Iceland.

The renter is 100% responsible for all parking fees, tunnel tolls, speeding tickets, and any other traffic-related fines incurred during the rental period. These costs are not included in your rental rate.

Direct Payment Requirement

Most parking areas (including National Parks like Þingvellir and Skaftafell) and the Vaðlaheiðargöng tunnel in North Iceland use automated camera systems. You are required to pay these fees via the official apps (e.g., Parka or EasyPark) or websites within the required timeframe.

Unpaid Fees & Administrative Charges

If you fail to pay for parking or tolls during your trip, the authorities will notify Hertz Iceland. In these cases:

• The Fine/Fee: We will charge your credit card for the original outstanding amount.
• Service Fee: An Administrative Fee will be added to every individual ticket or toll processed by our team to cover the cost of handling the legal notification.

_{Hertz Iceland reserves the right to modify or amend its Terms of Service at any time without notice. Hertz Iceland also reserves the right of final decision on the interpretation of its Terms and Conditions.}