6 Tips for renting a car in Iceland.

Our rental car in Iceland.

“18,500 Kronur ($166),” the 20-something Icelandic tourist center agent says when we ask the cost to rent a car.

“Per day?” we exclaim. “Yes,” she says. We smile and decline, and later find a car for half the price online.

Renting a car in Iceland may not be the cheapest way to explore the island (it’s tough to beat hitch hiking) but it doesn’t have to blow your budget. With public transportation being non-existent outside of the larger cities, like Reykjavik, renting a car gives you the freedom at a fraction of the cost when compared to the sightseeing tours sold at tourist information centers.

Below are six ways to save money on your Iceland car rental.

Go online: The best deals can be found online for Iceland car rentals. We cut our cost in half by going through Hertz.com as opposed to renting a car from the tourist center, and by about $25 from walk-in quotes from rental agencies in Reykjavik. Later, we found out about SADcars.com, which is by far the cheapest rental car company in Iceland. They even offer a 15 percent discount if you book online.

Pick up at Keflavik International Airport: Because the airport is located about an hour from Reykjavik, you will have to spend $20 – $25 each way to get to and from the airport. So, you might as well just rent your car from the airport and roll your shuttle bus fees into the car rental.

Get to know your vehicle: The longer you keep the rental car the cheaper it becomes.

Don’t buy it: You don’t need theft insurance for the vehicle. According to our agent at Hertz, car thefts in Iceland are rare and he actually told us not to bother with any of the additional insurance (yes, they have insurance for ash from the volcano) either, so we didn’t.

Petrol Blues: When considering renting a car be sure to factor in the cost of gas. In Europe, petrol is sold by the liter not the gallon; therefore, expect to pay about $5 per gallon.

Choose Your Rental Dates Wisely:  Sept. 1 in Iceland signals the beginning of the low season, which runs until May 31. Renting a car in Iceland becomes even cheaper during that time. And by cheaper I mean $35/day vs. $85/day – it’s a HUGE price difference. This is something we wish we knew ahead of time because we rented our car on 8/31 and found out about the price difference after we returned it on 9/1. Bummer.

Note from Beth:

Renting a car is really the best and only way to see the country so be sure to factor it into your budget. We went there thinking we would just take a bus to other areas -wrong. The only buses that exists outside the capital city of Reykjavik are tour buses. So technically you can take a bus but you will pay for it because it will be part of an organized tours and it will add up fast. If you are traveling with another person a car is the cheapest way to see the country. Plus, driving in Iceland is very easy and there isn’t much traffic.

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