What You Need to Know About Renting a Car in Iceland

By Jenna Gottlieb, author of Moon Iceland

If you plan to stay in Reykjavík for most of your trip or want to do short day trips in the southern or western parts of Iceland, it’s not necessary to rent a car; you can book tours and travel by bus. However, having access to a car gives you the ultimate freedom of seeing the island on your own schedule. But if you want a rental car and the freedom that comes with it, expect to pay dearly, especially in the summer months. Icelanders drive on the right side of the road.

A two-lane road leading between flat brown fields to snowy mountains in the distance under blue sky with puffy white clouds — A road in Iceland. Photo © Carmen de Bruijn/Dreamstime.

You can rent a car in advance or at the rental office at Keflavík International Airport, at BSÍ bus station, or within Reykjavík once you’re settled. In the busy summer tourist season, it is recommended to arrange your rental in advance because some dealers sell out early.

Choosing the right car for your trip depends on what you want to see and where you plan to go. If you plan on staying close to Reykjavík and traveling on well-paved roads, such as the Ring Road, a compact car is the best and cheapest option. However, if you plan on going out to the countryside or to the highlands, don’t try to get away with renting the cheap option. If you try to bring a compact car into a region that requires a 4WD vehicle, expect damage to the car at best, and being stranded and needing to be rescued at worst. Be smart and be prepared.

Rough gravel road leading between golden fields of grass under dark stormy skies — Gravel road near Reykhólar, Iceland. Photo © Henry Oude Egberink/Dreamstime.

Car rental companies provide “full insurance” for each rental, which is the basic third-party insurance option. For an additional fee, drivers have access to “extra insurance” that includes a collision damage waiver. However, be aware that you will not be covered for damage caused by rocks, snow, wind, ice, and all the other elements that could damage a vehicle. If you have any damage to a car, you will be charged a lot. Be sure to choose the right insurance for the region you plan to travel to. Gravel insurance is extra, and commonly purchased; if you’re planning to travel on unpaved roads, it’s recommended.

Plan your trip

Moon Iceland: With a Road Trip on the Ring Road

by Jenna Gottlieb

by Moon Travel Guides

Breathtaking landscapes, unrivaled trekking, and the creative spirit of Reykjavík: experience it all with Moon Iceland.

$19.99

$25.99 CAD

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Jenna Gottlieb

About the Author

Originally from New York City, Jenna Gottlieb fell in love with Iceland in 2006 on a spur-of-the-moment getaway. During that trip, there were many firsts: her first time riding a horse, walking behind a waterfall, and tasting the local delicacy “rotten shark.” She survived and continued to return, permanently relocating to Iceland in 2012.

While researching and writing this book, Jenna discovered new favorites and revisited old haunts. Her favorite experiences in Iceland include puffin watching, hiking in the north, and spending as much time in the West Fjords as possible.

A freelance writer specializing in travel, business, and lifestyle, Jenna has contributed to the Associated Press, Euronews, CNN Travel, The Independent, and The New European, among others. You can see some of her published work at jennakgottlieb.com.

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