A trip to Iceland should be on everyone’s bucket list. And the best way to experience its volcanoes, glaciers, waterfalls, black sand beaches, canyons, and wildlife is to drive around yourself. I’ve been to Iceland on a few occasions and we even took 10 days to drive the Ring Road for our sort-of-honeymoon. Here’s what to know about renting a car in Iceland for the best experience.
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Renting a car in Iceland highlights
- You need to rent a car in Iceland to see the country’s best sights. Public transport isn’t very extensive beyond Reykjavik.
- Icelanders drive on the righthand side and the roads are pretty chill — wide and without heavy traffic. However, winter driving requires a sturdy 4×4 or AWD vehicle and some confidence.
- Car rental prices in Iceland change significantly depending on the season. Expect around 50,000 ISK to 150,000 ISK for a week, but maybe even more for a 4×4 in the summer.
Renting a car in Iceland lets you access beautiful places like these!
Do you actually need a rental car in Iceland?
The short answer is yes, hiring a car in Iceland is essential unless you’re staying in Reykjavik the entire time. But of course it all depends on your itinerary and what your must-sees are. You can get away with basing yourself in Reykjavik and doing day tours like the Golden Circle or South Coast. But having the flexibility to move around at your own pace is soooo worth it.
And the public transport system around Reykjavik is great but doesn’t really extend beyond the city. If you want to see the famous Skogafoss waterfall, any of the ice caves, or Reynisfjara black sand beach, they’re all daytrippable from Reykjavik but you need a car.
Should you rent a car in Iceland if you’re nervous about driving in another country? I’d still say a soft yes if you’re going in the summer. The roads are wide, flat, and there isn’t really any traffic once you leave Reykjavik. (Ok there’s also not even really traffic in Reykjavik now that I think about it.) Winter is a whole different beast and if you’re feeling nervous about it, don’t do it.
Travel essentials for Iceland
📶 eSIM
Stay connected with internet access in most areas of the island.
💸 TravelSpend
Track your budget easily (ft. a colourful doughnut chart with stats).
✈️ Seats.aero
Find and book flights with your points for Aeroplan, Qantas, Delta & more.
💳 Wise or Revolut
Compare the best multicurrency cards for spending in ISK like a local.
The cost of renting a car in Iceland
I’ll be so real with you: Iceland is not a cheap country to travel, and renting a car will be a significant part of your trip budget.
Lots of people visit for the northern lights and dramatic snowy landscapes, but fewer are brave enough to drive in the challenging cold-weather conditions. (Fair.) So prices tend to be lower in the winter, while summer is the most expensive time to rent a car in Iceland. For a week-long rental, here are some car rental Iceland price examples using different car models (updated July 2026).
For quick reference, click to see the current ISK conversion rate to other currencies: 10,000 ISK
| Vehicle | Season | Weekly cost estimate (ISK) |
|---|---|---|
| Hyundai i10 (city car) | Winter | 40,000 ISK |
| Dacia Duster (4x4 SUV) | Winter | 60,000 ISK |
| Volvo XC90 (luxury 4x4) | Winter | 180,000 ISK |
| Kia Picanto (city car) | Summer | 70,000 ISK |
| Suzuki Jimny (4x4 compact SUV) | Summer | 110,000 ISK |
| Tesla Model Y (electric 4x4 crossover) | Summer | 130,000 ISK |
You could also go ultra luxe premium top of the line Iceland adventure vehicle and get a 4×4 Land Rover Defender. But it’ll cost ya upwards of 250,000 ISK for a week. And I’m guessing if that’s within your price range, you probably don’t need to be reading a blog about choosing the best car.
There are two payment options with DiscoverCars
- Partial prepayment: You pay part of the total car rental price when you book and the rest at pick up.
- Full prepayment: You pay the full price of the rental when you book, but can still cancel for a refund up to 48 hours before your trip.
Fuel costs in Iceland
Gas usually hovers around 220 ISK per litre. So not cheap! For reference, we spent 50,000 ISK over 10 days of driving the full Ring Road. Painfully expensive, but entirely worth it.
You can use a fuel cost calculator like this to get a loose estimate of what you’ll spend. And I use the TravelSpend app for trip budgeting to see what I actually spend when all is said and done. Though we went for our honeymoon, so money wasn’t real.
Iceland parking fees
Unfortunately, parking fees are becoming more and more of a thing across Iceland. You’ll need to pay to visit several waterfalls (including Skogafoss, Seljalandsfoss, and Kirkjufellsfoss), the old plane wreck on the beach, and the Jökulsárlón Glacial Lagoon.
Parking fees range from 200 ISK to 1,000 ISK and are usually a one-off payment rather than per-hour rate.
Choosing the right Iceland rental car
No matter what’s on your Iceland itinerary, I think you should definitely rent an SUV. A 4×4 SUV is especially important for winter visits, but it’s still a vibe and useful throughout the summer. Iceland is rugged in the best way.
We drove the entire Ring Road in April and rented a Kia Sportage, which was perfect. It snowed a couple of times and we had to manoeuvre pretty bumpy roads to reach some waterfalls and even one of our hotels. A city car simply wouldn’t have been able to handle any of that safely.
Electric cars in Iceland
Renting an electric car in Iceland is becoming increasingly feasible. In fact, Iceland aims to ban new gas and diesel cars by 2030! Not totally surprising coming from a country with such a commitment to the environment, but still.
But whenever you rent an electric car, it requires additional road trip planning. You need to make sure you take advantage of charging stations whenever you can, as you can find yourself completely alone on long stretches of road. But more chargers are being installed all the time.
South coast Iceland parking tip
Niche, but I want you to know: Parking at the Skogar Museum (where you’ll park to access Kvernufoss) costs 750 ISK. But if you’re going to the museum, your ticket includes free parking — so don’t pay twice!
The indoor/outdoor museum is 2,750 ISK for adults and super cute. Not like a #1 must-do, but still worth a visit.
Top rental car companies in Iceland
Here are some of the most well-rated car rental companies in Iceland. (And one I would skip based on reviews and horror stories.)
- Hertz: This is who we used on the honeymoon Ring Road trip. Everything was smooth and they even gave us a free upgrade!
- Saga: Offers zero deposit bookings which is ideal if you don’t have a credit card (or it’s maxed out?). They also stock Ford Broncos if you want something that looks suitably rugged for your Instagram.
- Europcar: Globally reputable and good for electric and hybrid 4x4s if you want to cut fuel costs when renting a car in Iceland. They also have Land Rovers, Mitsubishi Outlanders, and Suzuki Jimnys.
- Blue Car Rental Iceland: I haven’t used them myself, but they’re consistently one of the highest-reviewed places for renting a car in Iceland.
- ZeroCar: Markets itself on zero excess and a seamless keybox (aka human-less) pickup system at Keflavik Airport.
- Maybe skip: Indie Campers. I don’t have personal experience with this one. But multiple readers and a thorough Reddit thread describe damage disputes and unexpected charges. If you do it anyway, at least photograph/video everything about the car inside and out at pickup so you have a solid record.
I use DiscoverCars to compare. It pulls current available cars from local companies in one search, which is ideal because car rental Iceland prices vary more between companies than you might expect. It also lets you shortlist some to compare side-by-side, feature-for-feature. Guide to Iceland also has a car rental page for even more comparison.
Best drives worth renting a car in Iceland for
You actually can’t go wrong when planning your road trip itinerary in Iceland. The entire country is spectacular and the landscapes are always changing. But for some inspo, here are some of the most epic self-drive routes with great stops along the way.
Distances are based on a round trip from Reykjavik.
- Snaesnafelles Peninsula (200 kms): A compact loop with a glacier-capped volcano, fishing villages, and the Shark Museum, where you can try fermented shark! The taste isn’t for everyone, but YOLO.
- Golden Circle (300 kms): By far the most popular loop near Reykjavik that takes you to the impressive Gullfoss, Kerid Crater, and Thingvellir National Park.
- South Coast (600 kms): It’s busy, but you’ll hit all the major Iceland bucket list spots here. Skogafoss, Seljalandsfoss, Diamond Beach, Jökulsárlón Glacier, and more.
Skogafoss. Rent a car in Iceland so you can get here early, before the tour buses!
- Northern Iceland (800 kms): Godafoss, whale watching in Húsavik, Skútustaðagígar “pseudo-craters,” and the Myvatn Baths are a few highlights. You could fly from Reykjavik to Aykureyi and rent a car there if you don’t have time to drive all the way up.
- Eastfjords (1,000 kms): The quietest and most underrated area of the country with tons of cute fishing villages among fjords. We saw reindeer and whales, and stopped at the geothermal Vök Baths that are built into a lake.
- Ring Road (1,500 kms): The ultimate trip! You’ll go on so many side quests it’s actually more like 2,500 kms, so make sure you get unlimited mileage when you rent a car in Iceland.
Don't forget an eSIM for your Iceland trip!
You’ll want consistent internet access to map your driving route. Some rental cars offer a little wifi device (usually around 1,000 ISK extra per day). They’re cool but you have to keep them charged and carry them around when you leave the car.
An eSIM costs even less and means you’ll have data wherever you go — even as soon as you land at Keflavik. It’s a no-brainer for me. I compare the best eSIMs for international travel in another article.
Essential requirements for renting a car in Iceland
- Valid driver’s licence: You must hold a full licence in your home country. And you may require an International Driving Permit (IDP) if your license isn’t in English.
- Passport: Probably required to verify your identity at pickup (not just your license!).
- Credit or debit card: Make sure the name on the card matches the main driver’s name! This is required for payment and/or the security deposit, which is typically blocked (not charged) on your card until the car is returned undamaged.
- Minimum age: Most rental companies require drivers to be at least 20 years old, with higher age limits for larger vehicles or 4x4s. You can filter for this on DiscoverCars.
Can you rent a car in Iceland at 18?
Most Iceland car rental companies require foreign drivers to be 20+. However, a handful of companies allow you to drive compact cars (fine for city driving) if you’re 18 or 19 and have had your license for at least one year. For example, Avis will rent you a car at 18 or 19, but they charge a Young Driver fee.
Renting a car in Iceland checklist
- Use the filters to find suppliers with an 8.0+ rating for the best experience.
- Check the mileage policy. (I highly recommend unlimited mileage!)
- Choose a suitable type of car. (4×4 or AWD if you’re deviating from main roads.)
- Consider getting Full Coverage.
- Read the Rental Conditions before booking.
- Take a few minutes to read about Iceland’s road rules.
- Bring your booking confirmation details when you pick up the car.
- Take detailed photos of the car’s condition before you start driving.
FAQs about renting a car in Iceland
Here are some answers to questions you may have before you’re ready to book your Iceland rental car.
What's the Iceland road charge?
Iceland introduced a new road charge in 2026 that replaces the old fuel tax. It’s a per-kilometer rate that applies to all cars: electric, diesel, and petrol.
In most cases, it’s about 7 ISK per kilometer. Some rental companies are including this as a flat rate to make the process easier for visitors. But because it’s such a new law, it’s worth asking about it before you book and/or start driving.
Overall, this should actually make driving a petrol car a bit cheaper. But you can read more about the per-kilometre fee on the government site.
Do I need a 4x4 in Iceland?
You don’t need a 4×4 for the South Coast or the area surrounding Reykjavik in the summer. But if you’re driving anywhere in the winter or doing the full Ring Road and heading onto F-roads in the Highlands, then you yes, you absolutely need a 4×4.
What's the lowest cost to rent a car in Iceland on a budget?
A small hybrid car in the shoulder seasons is your cheapest realistic option if you’re on a shoestring budget. If you just want to visit Iceland for three days in the shoulder season, a good price for a little Kia Picanto would be about 20,000 ISK. Steep if you’re on your own, but if you’re exploring with friends, not so bad!
DiscoverCars lets you compare providers side-by-side and usually offers a good cancellation policy. (But double-check before you lock in a booking!)
Can I rent a car in Iceland if I'm under 25?
Yes, you can drive a rental car in Iceland if you’re under 25. However, how old to rent a car in Iceland isn’t the same across the board, and some companies may put restrictions on this or charge a “Young Driver Fee.” You’ll find all this info in the Rental Conditions. But you can also input your age when you search on DiscoverCars so it will only show you rental cars in Iceland that accept young drivers.
(Fun fact: Some rental companies also have a maximum age!)
Do I really need to read the Rental Conditions?
Before renting a car in Iceland, make sure you read the Rental Conditions. You don’t have to go through everything with a fine-toothed comb, but all rental companies differ and you should understand the conditions before you hit the road. It’s also helpful when comparing cars through DiscoverCars, as one that’s cheaper may have conditions that don’t jive with your plans.
Do I need Full Coverage?
I always think it’s worth opting for Full Coverage through DiscoverCars when you rent a car in Iceland. (Or anywhere else for that matter.)
It’s never crazy expensive and covers the deductible for theft, damage, and things like repairs, towing, and key loss/lock out. It’s just extra peace of mind. You can always find the details of what this includes before you book.
Is Iceland a good place to rent a campervan?
Yes, for the most part. There are tons of campsites around the country, most with epic views. (Hard to avoid in Iceland!) And it’s a more cost-effective option than car/hotel. However, the weather is pretty mild year-round and it can get a bit miserable if you’re freezing, if it’s raining, or if it’s windy af.
Also, I don’t have experience with this company myself, but a few people on Reddit have warned against Indie Campers. One tourist who rented with them got charged for damages they’d didn’t cause, but ultimately fought it and got their money back. They outlined a helpful step-by-step guide of what to do if you get overcharged, which might come in handy if anything happens to you!
Do I need a credit card to rent a car in Iceland?
Not always, but it depends. Most car rental companies accept debit cards for payment but might require a credit card for the deposit. And even when they let you pay the deposit with a debit card, it might be more than the hold on your credit card.
Check out the Security Deposits section in the Rental Conditions. And to avoid surprises when you pick up your Iceland rental car, use DiscoverCars’ debit card filter when you search.
Is Iceland worth visiting if I can't drive?
Absolutely yes! How dare you even ask. If you don’t have a license or there’s another reason you can’t rent a car in Iceland, you have options. Base yourself in Reykjavik and catch day tours from there. There are tons of options on Get Your Guide ranging from big tour buses and small group tours to to private trips.
You can also look into multi-day tours that includes transport, hotels, and meals. Reykjavik has lots of fun things to do. But renting a car in Iceland is the best way to see the “real Iceland” — one of the most beautiful countries in the world!
Naomi Lai
Naomi is a Canadian travel editor and writer with 13 years of international travel across Southeast Asia, Europe, South America, New Zealand, and beyond. She covers everything from budget backpacking to luxury travel — always from personal experience.
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