Economy Car Rental in Iceland

If you’re travelling solo or as a pair and want to see Iceland without spending more than you have to, an economy car rental is the most affordable way onto the road. It’s our cheapest category for a reason — these are small, no-frills cars built to get you efficiently between Iceland’s paved main routes, not to impress you with comfort. If that trade-off works for your trip, you’ll save real money.

Hertz Iceland’s economy car rental options are ideal for a solo traveller or a maximum of two people with light luggage, sticking to Route 1 during the summer season. If you want more room, a smoother ride, or you’re travelling with a third passenger, we’d honestly recommend stepping up to our compact car category instead — comfort is where economy cars are deliberately stripped back to keep the price down.

One thing worth knowing before you book: economy car rental in Iceland is one of our most requested categories every summer, and it sells out fast. Vehicles for June are typically fully booked by April or May. If you want the lowest rate on the smallest car, book early.

Why Rent an Economy Car in Iceland?

The honest answer: price. An economy car hire from Hertz Iceland is the lowest daily rate in our fleet, and it earns that price by being exactly what it sounds like — a small, simple, fuel-efficient car with no extra comfort built in. No plush seating, no extra boot space, no all-wheel drive. What you get is a reliable way to cover Iceland’s main paved routes at the lowest possible cost.

For a solo traveller or two people travelling light on a short Golden Circle or South Coast trip in summer, that trade-off makes complete sense. It’s not the right choice if you want space, a smoother ride, or you’re planning to drive outside the summer season — for any of those, sizing up to compact or 4×4 will serve you far better.

Trunk Capacity · Economy

See How Much Actually Fits

Shown: Hyundai i10 or similar

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Trunk Closed

Compact economy footprint

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Empty Trunk

1 Large Bag Capacity

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With One 28″ Suitcase

At full capacity — this is the limit

Large Bags 1

Seats 5

Transmission Automatic

*Photos shown are representative of this vehicle class. Actual boot shape and capacity may vary slightly by “or similar” model.

Who Should — and Shouldn’t — Rent an Economy Car

Economy Car Availability and Roads in Iceland

Economy cars at Hertz Iceland are a summer-only, paved-road-only category. They’re available specifically for the season when Route 1 and Iceland’s main connecting roads are clear, dry, and free of ice — roughly May through September. Outside that window, we don’t recommend this category at all, and availability reflects that: economy cars are not part of our winter recommendation.

Within the summer season, economy cars are built for Route 1 and other paved main roads — the Golden Circle, the South Coast as far as Vík, and short Reykjavík-based trips. They are not suitable for gravel detours, F-roads, or any Highland driving, regardless of season; low ground clearance and 2WD (on most models) make that kind of terrain a real risk for the car and for you.

Because this is consistently one of our most requested categories for summer, and our fleet size in this class is limited by design, economy car rental options for June are typically fully booked by April or May. If your travel dates are set, we strongly recommend booking as early as possible rather than waiting closer to your trip.

Why Rent Your Economy Car with Hertz Iceland

• Newer, reliable fleet

  Even our smallest category is kept under 2.5 years old, so a lower price doesn’t mean an older, less reliable car.

• Prime location inside KEF Airport

  Collect your economy rental directly inside the Keflavík Airport arrivals hall — no shuttle buses, no waiting outside.

• Transparent pricing

  No hidden surprises. Kilometer road tax, fuel type, and every included item are disclosed upfront before you book.

• Iceland expertise since 1971

  We’ll tell you honestly if an economy car isn’t the right fit for your trip — advice you won’t get from a booking engine alone.

• Low rate in Fleet

  Economy is our entry-level category by design — the most cost-effective way into a Hertz Iceland rental.

• 24/7 nationwide assistance

  Even on a budget booking, emergency assistance is available around the clock, anywhere on the island.

Explore Our Economy Rental Fleet

Our economy category is mostly manual transmission, with automatic available on two models. Every car here is genuinely small — that’s the trade-off that keeps the price down.

The Real Cost: 2026 Road Usage Charge

As of January 1, 2026, the Icelandic government replaced older fuel taxes with a kilometre-based Road Usage Charge, which applies to every vehicle — including every economy rental.

How Much Does an Economy Car Rental Cost in Iceland?

Since fuel prices dropped roughly 27–34% alongside the January 2026 road tax change, the total driving cost for an economy car is genuinely lower than it used to be. Here’s a realistic budget for the Toyota Yaris, based on average efficiency of 5.5–7.6 L/100km and a petrol price of approximately 210 ISK/L.

Route Scenario	Total Distance	Kilometer Tax (8.35 ISK/km)	Estimated Fuel Cost	Total Driving Cost
Golden Circle Trip	300 km	2,505 ISK	~4,095 ISK	~6,600 ISK
South Coast (to Vík)	380 km	3,173 ISK	~5,187 ISK	~8,360 ISK

_{Note: we’ve left the full Ring Road out of this table intentionally — at 1,332 km, it’s a multi-day route better suited to a compact or 4×4 car for comfort, and outside the paved-road, short-trip use case economy cars are built for.}

Tips on Renting an Economy Car in Iceland

• Book as early as possible. This is one of our most requested categories in summer, and June dates are typically sold out by April or May.
• Keep your group to 1–2 people. These cars are genuinely small — a third passenger or extra luggage will be a tight fit.
• Plan for paved roads only. Economy cars are built for Route 1 and main connecting roads — not gravel detours or F-roads.
• Travel between May and September. We don’t recommend this category for winter driving — for October–April trips, a 4×4 SUV is a safer, more suitable choice.
• If you want comfort, size up. Economy cars are deliberately basic to keep the price low. If a plusher seat or a smoother ride matters more than saving a few thousand ISK, our compact category is the better fit.
• Confirm your transmission. Most of our economy fleet is manual — only the Toyota Yaris and Hyundai i10 are available in automatic, and they’re in especially high demand.

Quick Comparison: Economy vs. Other Categories

Best Routes for Your Economy Car Hire

Best Routes for Your Economy Car

All three of these work well within an economy car’s summer, paved-road sweet spot — no gravel detours required, and each is realistic for a solo traveller or pair with light luggage.

Snæfellsnes Peninsula

ReykjavíkBorgarnesSnæfellsjökullReykjavík

Often called “Iceland in miniature,” this compact peninsula loop is mostly paved and easily manageable in a small car. Coastal villages, lava fields, and the glacier-capped Snæfellsjökull volcano make it a rewarding day trip without needing anything more than a reliable economy hatchback.

Best Time: June to August; a full day at a relaxed pace.

The Ring Road (Summer Only)

ReykjavíkVíkHöfnEgilsstaðirAkureyriReykjavík

The full 1,332 km loop is achievable in an economy car specifically in summer, when Route 1 is fully paved, clear, and free of ice. Keep your pace relaxed, your luggage light, and your group to 1–2 people — this is the one route on this list where the economy category is working close to its limit, so build in extra driving days rather than rushing it.

Best Time: June to August only; allow 7–10 days.

Reykjavík to Akureyri

ReykjavíkBorgarnesBlönduósAkureyri

A more manageable alternative to the full Ring Road if you want to reach North Iceland without committing to the entire loop. Around 390 km of paved main road connects the capital to Iceland’s second city, with easy fuel stops along the way — comfortably done in a single summer driving day in an economy car.

Best Time: June to August; roughly 5 hours of driving one-way.

Economy Car Rental Requirements in Iceland

• Economy cars are available for summer rental only (approximately May to September) and are not recommended for winter driving.
• All economy models are restricted to paved main roads. F-roads and Highland tracks are not permitted, regardless of season.
• Debit cards are accepted for this category, provided they carry a 16-digit number starting with 4 or 5.
• CDW and TPL insurance are included as standard. We recommend our MAX Coverage package, since even paved-road driving on the South Coast carries gravel and sand exposure risk not covered by standard protection.
• The “Or Similar” guarantee applies: we confirm transmission type (automatic stays automatic) and core vehicle dimensions, even if the exact model varies.
• This category is best suited to 1–2 passengers with light luggage. If your group or luggage needs exceed this, choose compact or a larger category instead.

Pick Up Locations for Your Economy Car

Keflavík International Airport (KEF): Pick up your economy rental directly in the Arrivals Hall immediately after landing.
Reykjavík City (Downtown): Staying in the city first? Pick up your car at our downtown office before your day trips begin.

Economy Car Rental Iceland: Frequently Asked Questions

• What is an economy car rental in Iceland?

  An economy car is our smallest, most budget-focused vehicle category — a basic, fuel-efficient car with no extra comfort features, built specifically for paved-road summer travel by a solo traveller or a maximum of two people.

• Is economy car rental in Iceland cheap?

  Yes — it’s genuinely our lowest daily rate. The trade-off is comfort: economy cars are smaller and more basic than any other category, which is exactly what keeps the price down.

• How far in advance should I book an economy car?

  As early as possible. Economy is one of our most requested categories every summer, and vehicles for June are typically fully booked by April or May.

• Can I rent an economy car in winter?

  We don’t recommend it. This category is built for summer, paved-road driving. For October–April travel, a 4×4 SUV is the safer and more suitable choice.

• How many people fit in an economy car?

  Comfortably, 1–2 people with light luggage. All models officially seat 5, but with only 1–2 pieces of luggage capacity, this category works best for solo travellers or pairs.

• Should I upgrade from economy to compact?

  If comfort matters to you — a better seat, more space, a smoother ride — yes. Economy cars are deliberately basic to hit the lowest price point. Compact is a small step up in cost for a meaningfully more comfortable trip.

• Are economy cars available in automatic?

  Most of our economy fleet is manual transmission. Automatic is available on two models — the Toyota Yaris and Hyundai i10 — and these book out fastest of all due to limited numbers.

• Can I drive an economy car on F-roads?

  No. Economy cars are 2WD (with one 4×4 exception, the Suzuki Swift, which still isn’t F-road rated) and are strictly prohibited on F-roads and Highland tracks by law.