How to Rent a Car in Iceland

Iceland, also called the land of fire and ice, is one of the most breathtaking destinations in the world. With glaciers, volcanoes, black sand beaches, and geothermal hot springs, it’s no wonder so many travelers have it on their bucket list. But if you want to really experience everything the country has to offer then you’ll need to know how to rent a car in Iceland.

At Hertz Iceland, we’ve been helping travelers navigate the country for over 50 years. We know that renting a car in a foreign country can feel overwhelming, so we’ve put together this guide to answer all your questions. From choosing the right vehicle to understanding driving conditions and rental policies, we’ll make sure you’re fully prepared to hit the road and experience Iceland your way.

Related links: Rent a car in Iceland; Rent a car from the Iceland airport.

Table of Contents

1. Do You Need to Rent a Car in Iceland?
2. Requirements for Renting a Car in Iceland
3. Choosing the Right Rental Car
4. How Much Does it Cost to Rent a Car in Iceland?
5. Picking Up Your Rental Car
6. Driving in Iceland: What You Need to Know
7. Returning Your Rental Car
8. How to Rent a Car in Iceland for the Best Price?
9. Frequently Asked Questions (FAQs)

Do You Need to Rent a Car in Iceland?

One of the first questions that tourists ask is whether they actually need to rent a car in Iceland or not. The answer is almost always yes. Unlike many European destinations, Iceland doesn’t have a extensive public transportation system that connects visitors to its natural wonders. While we do have public buses, they mainly stop in small towns and schedules are very limited. If you hire a taxi or take domestic flights, you can expect to pay a very high price tag, and it will still limit where you can go.

Guided tours are also an option, but they lack flexibility and you will have to plan around the tour company’s schedule. Renting a car gives you the freedom to go where you want, when you want, whether that’s chasing waterfalls, venturing into Iceland’s Highlands, or trying to spot the Northern Lights.

Requirements for Renting a Car in Iceland

Tourists and foreigners are legally permitted to drive in Iceland as long as they meet the following requirements:

• A valid driver’s license held for a minimum of one year at the time of rental.
• An International Driving Permit (IDP) is only required if your license is not in the Roman script/Latin alphabet.
• A credit card in the main driver’s name is required for booking and rental purposes. Hertz Iceland accepts Visa, Mastercard, American Express, and Hertz Charge Card (H.C.C.)
• The minimum age to rent a car in Iceland is 20 years for economy and compact cars. For larger vehicles like 4×4 SUVs and luxury cars, the minimum age is 23.

Choosing the Right Rental Car

The best rental car for your trip depends on when you’re visiting, where you’re going, and how many people are in your group. Iceland has diverse terrains, from paved highways to rugged mountain roads, so choosing the right vehicle is essential.

If you are staying near Reykjavik or driving the Ring Road during summer, a 2WD car may be enough. However, if you plan to travel to the Highlands or use any F-roads, a 4×4 vehicle is required. Icelandic law prohibits 2WD cars from driving on F-roads due to their steep inclines, gravel surfaces, and occasional Iceland river crossings.

During winter months, a 4×4 rental vehicle is also recommended to navigate Iceland’s icy and snowy conditions. Even if you don’t plan to visit remote areas, winter storms can make driving in a standard car more difficult.

You can choose from a range of different cars so you can find one that fits what you need, including economy cars, compact cars, intermediate cars, full-size cars, 4×4 SUVs and jeeps, campers and motorhomes, electric cars and luxury cars. If you hold a special driving license that allows you to drive passenger vans or minibuses, we also offer an option to hire a van or minibus for your Iceland trip with your big group of friends.

How Much Does it Cost to Rent a Car in Iceland?

Compared to other countries in Europe, Iceland is an expensive travel destination. Everything needed to support the island needs to be imported, from farm equipment to food and gas for cars. It’s important to keep that in mind, as when you are considering how to rent a car in Iceland, you will quickly notice that rental cars will come at a slightly higher price tag.

The cost of a rental car is largely determined by the time of year. During the high season (June to August), demand spikes, driving up prices for rental cars, tours, and hotels. In contrast, the low season (November to March) offers the best deals, making it the most budget-friendly time to rent. The shoulder seasons (September, October, April, and May) fall in between, with more moderate pricing. If you’re looking to save, planning your trip during the low season can significantly reduce costs.

If you want to know exactly how much your rental car in Iceland will cost, you can check the car rental price online by entering your exact travel date and time.

Picking Up Your Rental Car

Most visitors pick up their rental cars at Keflavík International Airport upon arrival. Before driving off, be sure to:

• Inspect the car for existing scratches or dents and report them to the rental company.
• Take photos of the vehicle as documentation.
• Confirm any add-ons, such as GPS or child seats, are included.
• Review the fuel policy to avoid additional charges when returning the car.

Hertz Iceland has 13 offices across the country, so you can access support no matter where you are traveling. Some rental companies allow you to pick up your car in one location and drop it off in another, providing flexibility for your itinerary.

Driving in Iceland: What You Need to Know

Driving in Iceland is different from other countries, and it’s essential to be prepared.

• Road Conditions: While the Ring Road is paved and easy to navigate, many smaller roads are gravel. In rural areas, you may encounter one-lane bridges, blind curves, and livestock crossing the road.
• Speed Limits: The general speed limits are 50 km/h in urban areas, 80 km/h on gravel roads, and 90 km/h on paved highways. Speed cameras are common, so always follow the posted limits.
• Fueling Up: Gas stations can be sparse in remote areas, so refuel whenever you have the chance. Hertz Iceland provides a gas discount keychain for savings at partnered stations.
• Weather Conditions: The weather in Iceland changes rapidly. Find up-to-date information about road conditions at umferdin.is before setting out on your journey. During winter, roads may be closed due to heavy snow or storms.
• Road Signs: The road signs in Iceland are in Icelandic, but there will always be a location name and road number on the sign, which are easy to read and don’t require you to know Icelandic. Additionally, most road signs are symbols that will point you in the right direction. Find out more about Iceland road signs here.

Returning Your Rental Car

Returning your rental car is simple, but a few steps can help you avoid extra charges. Make sure to refill the fuel tank if required. Most rental companies expect the car to be returned with the same fuel level as when you picked it up.

Check the car for personal belongings and take a few photos of its condition before drop-off. If you’re returning it to Keflavík Airport, follow the rental company’s instructions for a smooth handover. A quick inspection will be done, and if everything checks out, you’re good to go!

How to Rent a Car in Iceland for the Best Price

Car rentals in Iceland can be pricey, but there are ways to save money:

• Book your car early to lock in the best rates.
• Travel during the low or shoulder seasons when prices are lower.
• Consider renting a manual transmission car, which is often cheaper than an automatic.
• Check if your travel credit card includes rental insurance to avoid additional fees.
• Avoid unnecessary add-ons like GPS by using Google Maps on your phone.

Frequently Asked Questions

• • How much is gas in Iceland?
    The cost of gas in Iceland changes with the global market, as it does in all countries. That said, Iceland imports all of its petroleum, meaning that it does cost more than it would in mainland Europe. As a perk for booking a rental car with Hertz Iceland, you’ll receive a gas discount key chain, which will give you a percentage off gas purchases at our partnered local gas company.

• • Do Icelanders speak English?
    English is taught as a second language in Iceland, and Icelanders begin learning English from a young age. Almost everyone in Iceland speaks English fluently, making it extremely easy for tourists to communicate with locals. Icelanders who work in the tourism industry, such as for hotels, restaurants, tour agencies, or car rental companies, are even more proficient in English. So, don’t hesitate to ask for help during or before your trip.

• • Are all rental cars in Iceland manual?
    No, rental cars in Iceland come in both manual and automatic transmissions. However, manual cars are more common and often cheaper. If you need an automatic, it’s best to book in advance, especially during peak travel seasons.

• • Do you need a 4×4 car in Iceland?
    It depends on your travel plans. A 4×4 is required if you plan to drive on Iceland’s F-roads (highland roads) or during winter conditions for better traction. If you’re sticking to the Ring Road and main highways in summer, a 2WD car is usually sufficient.

• • Does Iceland have Uber?
    No, Iceland does not have Uber or any other ride-sharing services. Taxis are available but expensive, and most travelers prefer renting a car or using public transportation.

• • Do you need a car to get around Reykjavik?
    Not necessarily. Reykjavik is compact and walkable, with reliable public buses. However, if you plan to explore beyond the city, a rental car is the most convenient option.

• • What documents do I need to drive in Iceland?
    You’ll need a valid driver’s license from your home country. If your license is not in Latin script, an International Driving Permit (IDP) is recommended. You’ll also need a credit card for the rental deposit.

How to Rent a Car in Iceland?

Before renting a car in Iceland or any country, it’s essential to ask questions to ensure that your trip goes off without a hitch. By knowing what to expect and choosing a rental car company that provides all the services that you need, you’ll be free to explore everything that Iceland has to offer at your own pace.

Book a car with Hertz Iceland now to receive a 40% discount on your insurance coverage package!

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And to find out more about renting a car in Iceland, check out these other articles:

• 7 Tips for Renting a Car in Reykjavik
• 5 Things You Must Know Before Renting a Car at an Iceland Airport
Book Your Rental Car in Iceland Today and Lock the Rate!