Self-driving in Iceland is the best way to see this stunning country while helping to minimise over-tourism around Reykjavik. But there are a few important things to know. Here are our 15 Iceland car rental tips.


Perched on the mid-Atlantic ridge where the earth’s crust is thin, Iceland is a volcanic wonderland filled with dramatic landscapes. Bubbling mud puts, steaming vents, rainbow coloured mountains and hidden thermal pools are just some of the cool things to experience away from the popular tourist trail of the ring road.

But with limited public transport, the best way to see and experience all that Iceland has to offer is by hiring a car and getting off the beaten track. With the area surrounding Reykjavik rammed with millions of tourists, venturing further afield is a great way to reduce the impacts of over-tourism while still experiencing the wanders of this unique place.

While much of driving in Iceland is straight-forward there are a number of challenges. Weather conditions can be extreme, road quality is varied and insurance policies are confusing.

Furthermore, the type of car you decide to hire and your own level of adventurousness will determine where you can go and what you can see. So here are our 15 Iceland car rental tips plus some money-saving advice to help make this staggeringly expensive place a little more affordable.

TIP 1 / DRIVING IN ICELAND IS THE BEST WAY TO SEE THE COUNTRY

Iceland is a stunningly beautiful country with unusual sights dotted all around the island that you won’t see anywhere else. Colourful mountains with quirky hiking trails and bleak barren highlands are just some of the wonders unique to Iceland. But the public transport network has very limited routes and schedules run infrequently. So stopping off at a particular destination to explore can be a very time-consuming process. With the cost of accommodation in Iceland so high, you really want to be maximising your time.

Hiring a car and driving yourself is the best way to go. It allows you the freedom to see some of the less-visited and more interesting parts of the country in the most time-efficient manner possible.

Driving in Iceland is also an undertaking in itself. Cruising along the paved roads of the ring road in summer is a piece of cake. But, taking on steep mountain passes and crossing rivers in a 4×4 adds an extra dose of adventure you just can’t get any other way.

TIP 2 / UNDERSTAND THE DIFFERENT TYPES OF ROADS

RING ROAD / The most famous road in Iceland is the Ring Road. It forms a complete loop around the country. Although it can be driven in about 18 hours, most travellers will take 1 to 2 weeks to explore all the sights scattered along the route. The ring road and many of the other major roads in the large towns are well paved and easy to drive.

ACCESS ROADS / More minor access roads connect smaller towns and villages to the Ring Road. These are unpaved, gravel or dirt tracks, but relatively easy to drive on in all types of vehicles. Driving on access roads in summer is no problem, however, in winter they are cleared less regularly than the Ring Road so you need to be careful of ice.

F-ROADS / The F-roads in Iceland are unpaved gravel tracks that are not regularly maintained. The majority of them criss-cross the mountainous central highlands and generally have large potholes, ruts or large boulders that need to be navigated. Some are good gravel roads allowing for speeds of up to 80 km/h in places. Others are much more adventurous and involve fording rivers, steep inclines and driving over sand. F-roads are only open in summer and require a 4×4.

TIP 3 / BE PREPARED FOR EXTREME WEATHER

Iceland is just below the Arctic circle. The winters are cold and dark; even in summer, the sun doesn’t get far over the horizon. You can encounter snow and ice any time of year. In winter the storms can be severe and in summer the driving rain can be endless.

You should always check weather conditions before each journey and keep up to date with the current state of the roads including which ones are open or shut. The SafeTravel.is website has loads of up to date information and will help you decide where and when to undertake your journey.

In particular, beware the winds that whip over the Atlantic Ocean. Gusts can easily rip a car door off its hinges – something you’re not insured for. So park facing into the wind and be very careful as you get in and out of the car.

TIP 4 / BE CAREFUL CHOOSING THE CORRECT ICELAND CAR RENTAL

The most important Iceland car rental tip is to get the right type of vehicle for the holiday you want.

2WD / If you are visiting in summer and want to explore the scenery and towns around the ring road then a 2WD is perfectly adequate. You may have a few short bumpy journeys along access roads but nothing will be too difficult. A 2WD is also fine if you are coming in winter and sticking to the populated areas around Reykjavik where roads are paved and regularly cleared.

4×4 / If you come to Iceland in winter (November to April) and want to explore outside the populated areas a 4×4 is highly recommended. Ice and snow can quickly settle on the roads and they are not cleared as quickly as in the towns. You will also need 4×4 if you want to drive on the F-roads in the central highlands. These roads are only open from around late June to late September. It’s illegal to drive on F-roads in a 2WD.

We’ve put a lot of information together in a separate article about driving the F-roads of Iceland.


TIP 5 / INSURANCE IS A MUST BUT POSSIBLY NOT FOR THEFT PROTECTION

Like most things, renting a car in Iceland is not cheap. But what really pushes the price up is insurance. Gravel can fly off the road and into the windscreen, sand and ash can be carried by storms and destroy the paintwork, wind can rip-off doors and boulders and river crossings can damage the underside of the car.

So although it can be costly, it pays to invest in decent insurance. However, while your car will have to endure the elements in Iceland, it probably won’t come under any unnatural threats. Iceland is one of the safest countries in the world. Theft protection is often an additional extra when purchasing car insurance in Iceland for a good reason. It’s unlikely this is something you would need.

TIP 6 / READ THE SMALL PRINT

More than in any other country, you need to understand exactly what is included in your car rental insurance policy as a number of things will be extras. In a country with a landscape that can be brutal on a car, it pays to check.

For example, some policies won’t cover you for wind damage to the doors or for fording rivers above a certain depth. Others will exclude gravel damage, or sand and ash protection. It’s common for tyres to be excluded from coverage on insurance policies, and damage to headlights, windscreen and the underside of the car are generally not covered.

Make sure you ask exactly what’s covered when you pick the car up to decide if you need any additional insurance.

TIP 7 / DO NOT GO OFF ROAD, ITS ILLEGAL

While it is perfectly legal to drive on F-roads and access roads (which are generally gravel) going off-road – even in a 4×4 – is illegal in Iceland.

Iceland is a barren island very close to the arctic, where not much vegetation grows. Any damage caused to the few delicate plants that do manage to survive in this wilderness could take decades to recover. So, it’s very important to stick to the roads when driving in Iceland.

Icelanders are very keen to protect their wilderness from the millions of visitors who arrive every year. Local’s will actively report off-road driving to the police and the fines are significant.

In some of the more remote areas of Iceland – particularly along the F-roads – it can be difficult to actually see the road. This, however, will not work as an excuse if you get caught. So pay particular attention to the road in poor visibility.

TIP 8 / KEEP YOUR HEADLIGHTS ON

The sun is never that bright in Iceland, even in summer. Cloud, mist, rain and snow are common and as you drive along the sandy gravel roads great plumes of dust can splurge out around your car. It makes visibility poor, especially for the cars behind you.

So in Iceland it is required to have your headlights on at all times. This way cars in front of you can clearly see you coming. More importantly however, cars behind you – the ones that may be trapped in your plumes of dust and sand – can see the back of your car.

If someone flashes you, it will probably be because you have forgotten to turn your lights on.

TIP 9 / DON’T STOP IN THE MIDDLE OF THE ROAD

Iceland is a stunning country and while driving in Iceland you will be tempted to stop many times to take photos. But please don’t stop in the middle of the road. Almost all roads are only single lane (except for the ring road) in either direction. Stopping in the road slows down traffic and is a danger to other motorists.

If you see that iconic landscape you need to take a photo of, drive on a little further until you can see a clear parking place where you can pull over safely. Just make sure you don’t inadvertently go off-road trying to pull over.

TIP 10 / BEWARE OF ROAMING ANIMALS ON THE ROAD

Iceland has many farms spread all over the country and instead of fencing their livestock in they are free to wander wherever they want. As a result sheep, cows and cute highland horses can be found meandering all around the country.

But it also means you’re potentially sharing the road with them. So keep your eyes peeled and be alert to anything that may run across your path.

TIP 11 / KNOW THE SPEED LIMITS

Iceland is a very safe country and you won’t see many policeman about. But that does not mean they are not checking on you. Small grey boxes by the side of the road regularly monitor your speed. They are often sign-posted but not always. Like many other things in Iceland, breaking the speed limit is very expensive – up to $460USD. So when driving in Iceland take your time and savour the views instead.

The standard speed limits in Iceland are 50km/h in cities, 80km/h on gravel tracks and 90km/h on paved country roads.

TIP 12 / KNOW WHERE YOUR NEXT PETROL STATION IS

There are enough petrol stations along the Ring Road and access roads that getting fuel is not something you need to think too much about. However, once you venture off the main roads, petrol stations become considerably scarcer.

In the remote towns and popular attractions, fuel stops may be far less frequent. So, in these areas, fill up when you can to avoid the risk of running out.

However, keeping an eye on the petrol gauge is most important on the F-roads. Many of the F-roads through the centre of the country have no fuel stations at all. Those that do, are often few and far between. There’s also no guarantee that they will be open. Definitely, fill up before you set off on an F-road and monitor your distances – you’ll probably need to fill up again at the same petrol station when you return.

TIP 13 / DON’T RENT A GPS, DOWNLOAD OFFLINE MAPS INSTEAD

There are not that many roads in Iceland so navigation is relatively easy. Google has extensive coverage of the country but (even if you have purchased data) reception in less populated areas will be patchy. So make sure you download Google Maps for the area you intend to explore before setting off.

We highly recommend Maps.Me. This app also allows you to download maps for the area, but it has better offline functionality and more accurate estimates for journey times than Google maps.

TIP 14 / DOWNLOAD THE SAFE TRAVEL APP

Iceland takes safety seriously. If you decide to venture onto more remote roads, Icelanders are keen to stay in touch during your visit and make sure everything is going A-OK.

To facilitate this, download the Safe Travel App. Within the app you can submit a travel plan outlining where you’ll be each day. This way, the emergency services can find you quickly should anything go wrong.

Secondly, the app allows you to communicate with the emergency services, even if you have no phone coverage – ideal in the remote highlands of Iceland. Pressing the green “check-in” button will update them on your location and let them know everything is OK. Pressing the red button will send a text message with your location, telling them you have an emergency.

TIP 15 / BOOK YOUR CAR HIRE WELL IN ADVANCE (ESPECIALLY IN SUMMER)

Around 2 million visitors flood into Iceland every year and the vast majority come during the short summer season. With a resident population of only 350,000 people providing hotels and other services, things can get booked up fast.

So, make sure you not only book your accommodation well in advance but your car hire as well. If you want to head to the highlands, you’ll need a specific type of car, so you don’t want to run the risk of the car rental company running out of the car you need, ruining your well-laid travel plans.

HOW EASY IS IT DRIVING IN ICELAND?

The challenges of driving in Iceland are entirely dependent on the weather and the quality of the roads you choose to drive.

If you tour the ring road and the major towns during the summer months it is very easy and straight forward. But if you decide to bounce over the roughest of the F-roads or visit in the middle of winter it can be a difficult but exhilarating challenge.

So choose an itinerary and time to travel that suits the experience you are looking for.

INSTAGRAM / ANYWHERE WE ROAM

We are Mark & Paul. Curious + Adventurous. Anywhere We Roam is the story of our travels – the world as seen through our eyes.⁣⁣⁣

If you found this article helpful and you’d like to see more of our photography, head over to Instagram and follow our journey.⁣⁣⁣

As always, thanks for supporting our blog.⁣⁣⁣

2WD OR 4x4 CAR RENTAL IN ICELAND

The most important Iceland car rental tip is to rent the vehicle that allows you to have the holiday you want. Although Iceland is an expensive country, hiring a car is actually one of the few things priced similarly to other destinations.

Here is a quick look at options and rough prices (which rise during the summer months).

OPTION 1 – 2WD ECONOMY CAR

If you are travelling outside the winter period and intend to avoid the F-roads in the central highlands, then a 2WD will do the job. Almost all roads are paved although you may have the odd bumpy few hundred meters up a driveway or on a short minor road. Expect to pay around £30US and upwards, per day.

OPTION 2 – HIGH CLEARANCE 2WD

High clearance 2WD cars will help you on those bumpy driveways and minor roads but they are still not allowed to be used on the F-roads in the central highlands. They’re also not as good as a 4×4 in snowy conditions. Expect to pay around $US40 and upwards per day.

OPTION 3 – 4X4 VEHICLE

A 4×4 will use more petrol and is more expensive but you will be safer on icy roads in winter and can explore the F-roads in the central highlands in summer. Read our F-roads in Iceland article to see if this type of trip is for you. Expect to pay around $US60 and upwards per day.

OPTION 4 – CAMPERVAN

Accommodation in Iceland can be expensive and difficult to find so one money-saving option is to hire your own van to sleep in. Prices rise dramatically in high season but includes everything you need for cooking and sleeping in an environment that is much warmer than a tent. Keep in mind you also need to pay for camping fees each night. Expect to pay around $US100 and upwards per day.

RENTING A CAR IN ICELAND

Hiring a car in Iceland can be challenging. Many different providers have different add-ons and making it difficult to compare prices.

Our preferred partner when hiring a car is Auto Europe. They have access to cars from many of the major companies which are compared on a grid format that clearly displays the prices for different car sizes across each car rental. Check Auto Europe prices below based on your home location.

EUROPE CUSTOMERSUSA CUSTOMERS

Blue Car Rental, a local Icelandic car rental company, is geared towards helping travellers conquer the unique challenges of driving in Iceland.

BLUE CAR RENTAL / Check hire car prices

Neither Auto Europe or Blue Car Rental provide campervans. So if you want to see Icelande from a camper, check out Happy Campers.

HAPPY CAMPERS RENTAL / Check hire car prices

RENTING A CAR IN ICELAND

Hiring a car in Iceland can be challenging. Many different providers have different add-ons and making it difficult to compare prices.

Our preferred partner when hiring a car is Auto Europe. They have access to cars from many of the major companies which are compared on a grid format that clearly displays the prices for different car sizes across each car rental. Check Auto Europe prices below based on your home location.

EUROPE CUSTOMERSUSA CUSTOMERS

Blue Car Rental, a local Icelandic car rental company, is geared towards helping travellers conquer the unique challenges of driving in Iceland.

BLUE CAR RENTAL / Check hire car prices

Neither Auto Europe or Blue Car Rental provide campervans. So if you want to see Icelande from a camper, check out Happy Campers.

HAPPY CAMPERS RENTAL / Check hire car prices

EXTRAS & INSURANCE WHEN RENTING A CAR IN ICELAND

As mentioned in our Iceland car rental tips above, we suggest you get insurance. But beware it can significantly increase the cost of hiring a car.

INSURANCE WITH BLUE CAR RENTALS

If you rent with Blue Car Rentals theft protection, gravel protection and collision damage waiver (over and above an excess) are included for free. For 2WD the excess is 90,000 ISK and for 4×4 120,000 ISK. But there are a large number of exclusions. If damage is caused by negligence, while driving in water, by sand and ash, by wind blowing the doors off, or if any damage occurs to the tires, headlights, wind-screen or underside of the car then the excess rises to 350,000 ISK ($3,000).

That’s a potentially lumpy bill in a country with quite a few hazards. In order to reduce that risk you can buy a range of add on policies. The Sand & Ash protection costs about $12 a day. This lowers the excess for sand & ash damage to 90,000 ISK. Alternatively, you can buy a liability waiver that takes the excess for everything covered by their insurance to zero which costs around $25 to $35 a day.

INSURANCE WITH AUTO EUROPE

If you book through Auto Europe the upfront rental comes with basic insurance covering theft, third-party damage and liability all with a large excess ($3,000). But while Auto Europe’s upfront rates may look more expensive, their insurance is much cheaper. You can buy a refundable excess guarantee package for as little as $50 for the entire trip. If you damage the car your hire company will charge you the excess but you can then claim it back from Auto Europe. You do however have to go through the hassle of paying the rental company and claiming the excess guarantee back from Auto Europe.

INSURANCE4CARHIRE

Another good option is to buy an annual insurance policy from insurance4carhire. They have a policy that covers you for the unique challenges of driving in Iceland. All the details are available on their website.

WHERE NEXT?

If you found this guide useful, please head over to Instagram and follow us to stay up to date with our adventures.

To explore some of the places you can only get to via an F-Road read about our experiences driving to Askja or hiking the stunning mountains around Kerlingarfjöll.

Iceland in summer is a fantastic place to visit, especially if you get off the ring road and explore some of the hidden corners of this geographical wonderland. Read our Iceland itinerary to see how we did it.

If you have any questions please leave them in the comments section below – we will always reply. To stay up to date with our travels, follow us on social and signup to our NEWSLETTER.

Thinking about driving Iceland? Here are 15 Iceland car rental tips useful tips for driving in Iceland and some money-saving advice for hiring a 2WD or 4x4. #iceland #roadtripiceland #visiticeland

Thinking about driving Iceland? Here are 15 Iceland car rental tips useful tips for driving in Iceland and some money-saving advice for hiring a 2WD or 4x4. #iceland #roadtripiceland #visiticeland

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