6 Tips for renting a car in Iceland.

By Posted in - Big Trip & Iceland & Travel Blog & Travel Resources on November 3rd, 2010
A man looks at his car on the Ring Road and thinks about Iceland car rental tips for a travel story.

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 of our best Iceland car rental tips.

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. We hoped you enjoyed our Iceland car rental tips! 

Did you hear? We also make travel scarves with hidden pockets! You can check out our shop at Speakeasy Travel Supply.


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(49) awesome folk have had something to say...

  • Michael Tyson -

    November 3, 2010 at 7:18 am

    I’ll definitely be using this as a reference for our Iceland trip… that is if we ever make it there! Both getting there and getting around once you’re there seem to be very expensive. We’re determined though – it looks flippin amazing!

    How did you find other expenses whilst there, such as accommodation?

    • Bethany -

      November 3, 2010 at 9:46 am

      Hi Michael! Hostels run about $30/pp

      So to save money we camped and it was awesome. Actually Iceland was the best camping we encountered anywhere in Europe. That was only $20 for both of us a night and the
      Reykjavik campground is w/in walking distance (about 15 mins) to the city. AND it’s attached to a hostel so you get free wifi and you can use their showers (at least we did anyway) and you can hang out in the hostel. Also next door is a fantastic city thermal pool for about $3/day. Strangely we did better on our budget in Iceland than we did in Italy by far. We also ended up sleeping in the car on the night we had it to cut down on expenses and we only really ate out once since the food is very expensive. But we bought great food at the grocery stores. It was really fun and I would go back in a heartbeat but I would def. have to budget in renting a car. It’s the only easy way around the island (except for tours) and honestly after a couple days in Reykjavik I was bored and ready to see other places. Another note, hotels (even in nowhere land) were very expensive from what we encountered (which is what led to the car sleeping). We have a photo post coming out on Travel Squire about Iceland and I will start putting some up here as well. If you want to read more about the camping check out this post – http://beersandbeans.com/2010/09/11/camping-in-iceland/@Michael Tyson,

      • Michael Tyson -

        November 3, 2010 at 10:02 am

        @Bethany, Bloody hell – that adds up doesn’t it! I think it’s going to have to be a very speedy tour if we ever make it there. Either that, or live there for a while and buy a car and rent a place… actually that doesn’t sound like a bad idea. I wonder what their visa situation is like 🙂

  • The Icelandic Horse | beersandbeans.com -

    November 15, 2010 at 12:06 am

    […] seen one until we visited this September. When we rented a car for a day, we were able to drive through the Icelandic countryside and to my happy surprise, there were a lot of  Icelandic horses grazing in pastures. They are […]

  • […] days for a car rental – which would have been awesome! (Read this if you want some tips on renting a car in Iceland). In fact, I would love to return to Iceland specifically to drive around the entire […]

  • Sofia – As We Travel -

    March 16, 2011 at 8:03 pm

    Nice to see that there are some honest salesmen who don’t always try to sell you all the insurance they can to get commission.

    Funny how they now have insurance for ash from the volcano – probably new since the volcano eruption happened a while ago, a good way for the company to save themselves from paying the damage if it happens again…

    • Bethany -

      March 18, 2011 at 11:46 am

      Yes, I was kind of surprised by this as well. But I guess the ash did a lot of damage to the cars. The biggest issue there is they really don’t want you to go off road
      in the cars. That was their big sticking point. Driving in Iceland is super easy though and there is hardly anyone around – you def. don’t need the insurance there. 🙂@Sofia – As We Travel,

  • Cailin -

    March 19, 2011 at 8:49 am

    these are exactly the tips I needed! I’m thinking about going there in a couple weeks! 🙂

    • Bethany -

      March 20, 2011 at 9:06 pm

      Hi Cailin – definitely go! We had a blast and would love to go back. 🙂 @Cailin,

  • […] we could’ve halved our car rental costs. Please read our other post for more information about saving money on a car rental in Iceland. I will say this much: If I go to Iceland again I will put more money towards a car rental so I can […]

  • Dustin Main – Skinny Backpacker -

    April 12, 2011 at 12:22 am

    I’ve been planning on renting a car, as I arrive in late May, so it looks like I’ll get a few days at the cheap rate, and a few at the crazy rate heh.

    Unfortunately my Canadian driver’s license expired in September so I need to find someone else to drive the vroom vroom. 🙁

  • […] we could’ve halved our car rental costs. Please read our other post for more information about saving money on a car rental in Iceland. I will say this much: If I go to Iceland again, I will put more money towards a car rental so I […]

  • Muyersh Gambor -

    June 12, 2011 at 3:14 pm

    I was just comming from Iceland and I rented with http://www.comparecarrentals.is
    They offered a pretty good price on new cars, I was thinking about renting with sadcars, they also had pretty competitive price.
    I would recommend to rent a 4X4 if you have the chance since you can drive almost everywhere on a 4X4 but there are many places you cant drive to one a small car.

  • Car Hire Tips -

    November 4, 2011 at 10:26 am

    Hi Randy,

    We are really interested to read your post about Ireland Car Rentals. This is our first time to learn about car hire in Ireland. Very appreciated for your shared.


  • Chris -

    December 30, 2011 at 3:20 am

    Thanks for the informations, we will probably visit Iceland in April and your post gave us new ideas regarding the possibility to rent a car 🙂

  • SADcars -

    January 8, 2012 at 3:28 am

    Good tips! Driving is usually the best way to get around in Iceland. Rental cars are expensive but there are alternatives. We offer slightly older cars at around half the going price, so if you’re looking for budget rather than luxury, check it out.

    Regarding the insurance, theft is very, very rare, and the ash insurance is highly unlikely to be needed, but you do need to have good insurance in case of an accident. There are many gravel roads in Iceland which can be dangerous, specially if you’re not used to gravel roads.

  • Julien -

    October 14, 2012 at 4:27 am

    Me and my girlfriend just came back from a 14 day tour of Iceland. Iceland has amazing places to see, many of them in the highlands so a 4X4 is highly recommended. We rented from http://www.goccarrental.is which was cheaper then Sadcars. The cars are older models but well maintained. Recommended to any one looking for visiting Iceland on a budget.

  • Tom -

    October 15, 2012 at 4:24 am

    In order to explore the amazing wonders Iceland has to offer, it makes sense to hire a car.

    It is important to note that there are two signs you should look out for on the roads as you drive your car rental:
    malbik endar – meaning gravel road ahead
    Einbreio br – meaning there is a single lane bridge ahead.
    Remember to drive your car rental to the right and enjoy the amazing experience of driving in Iceland.

  • SADcars Make Me Happy | Katka Travels -

    December 4, 2012 at 6:27 pm

    […] because it’s all nature-based, so Lindsey and I decide to take the plunge. I find SADcars via BeersandBeans, whose experience with the company seems very pleasant. We want to see a lot of Iceland in a little […]

  • Carrentals.is -

    March 1, 2013 at 3:50 am

    You can also compare prices different local car rentals that offer anything from an old Toyota station (in which you can easily sleep in) to a brand new Range Rover. The site is local and the prices are very competitive.

  • Tony -

    May 24, 2013 at 12:03 am

    Always make sure you check with your credit card company if they cover insurance as this will save you a lot versus taking the car rental insurances

  • Tony -

    May 24, 2013 at 12:05 am

    I would also recommend using car rental price comparison sites to save you time on reasearch

  • Car Rental Iceland -

    May 31, 2013 at 5:16 pm

    Hi. Thank you for a great article. Great tips!

    Our website compares the rates of all major car rental suppliers in Iceland and finds you the best deal. We save our customers up to 50% off their car rentals. Don’t pay more then you need to 🙂

    Thank you again for a very informative article.

  • […] the most part, all of the costs are high. We went with SIXT. Check out this great blog post from “Beers and Beans” with some great hints for renting a car in Iceland.  There are a lot of strange […]

  • Anna -

    July 17, 2013 at 6:17 am

    Hi! I’m planning a trip to Iceland in February and this rental car guide was quite helpful!

    • Randy Kalp -

      February 28, 2014 at 7:54 am

      Sorry, just caught this now. I hope you had a wonderful trip. 🙂

  • Biekje -

    July 21, 2013 at 8:23 am

    Sterna has a good deal on buspassports on the ringcircle and gives you somekind of freedom to travel around Iceland.
    And drop offs are usually quite near campings too. Hurrah for budget travelling 🙂

  • Peter -

    September 9, 2013 at 1:08 am

    We just got back from Iceland on Thursday and rented with a local company called Reykjavík Cars (http://www.reykjavikcars.com/). It was the best choice we could have made. The car was affordable and reliable. A Reykjavík Cars representative dropped off and picked up the car and was always extremely responsive to our inquiries. On the last day, we got a parking ticket (despite having paid for parking) and they took on the responsibility of getting it cancelled for us.

  • emilian -

    September 13, 2013 at 4:42 pm

    I have also found the sadcars.com company before reading here

    1.still what I don’t know is what is al about that assurances?
    CDW 5 € Daily priceSuper CDW 15 € Daily priceGravel Protection 10 € Daily priceTheft Insurance 3 € Daily price

    2.if I don’t pay them,as you did not..what does this mean?you are saying they don’t force you to do it?so if something goes wrong…I should pay from my pocket for their car?

    and last question:
    3.how money do I have to have on my credit card so they give me the car(I heard something about blocking some money on your card? until you take it back)
    thanks a lot!

    • Randy Kalp -

      February 28, 2014 at 8:01 am

      Hi Emilian,

      Sorry I just saw your comment now.

      1. Those are the different types of insurances they offer.

      2. If you don’t want the insurance, then you don’t have to pay for it. However, if your gets damaged from gravel then you will be required to pay for it yourself. Before you rent a car, check with your credit card company to see what kind of coverage is included under the card.

      3. When renting a car (anywhere not just Iceland) it’s always better to use a credit card than a debit car because they can hold funds.

      Hope that helps. If you have any more questions, just let me know.


  • Liz -

    September 25, 2013 at 6:33 am

    We spent 5 days in Iceland and had a great time. SADcars definitely put a damper to our Iceland experience. We rented a Subaru Legacy. The car was in okay condition – lots of scratches and dents, plastic license holder broken and sticking out, key hole not functioning properly to lock and unlock the car, no keyless entry, no power locks, no cruise control, headlights not bright, window wipers not wiping properly. This was all okay. We missed many days of our trip waiting for the storm winds to die down to protect the car – which was okay since it was our choice. What was NOT okay was when we returned the car, the guy said everything was ok, no damage, we signed the papers, got into the van to go back to the airport, and the guy went to get his boss because there was “a problem.” His boss tried to tell us that the car was “a little lighter in color” so he was charging us for a paint job. Tried to tell us it was 3000 euros but only charging us 1750 euros. No charges were itemized. Said that we could not leave and will miss our flight if we dont give him money – which sounds like a threat to me. There was no proof of any color change. He tried to show us a picture online from when they first got the car! What does that have to do with me?! States he was charging everyone this week because of the storm (regardless of the condition of the car because the storm was “bound to damage the car”). They didn’t say anything about the storm before we left. They live here, and should be familiar with the weather and what we would have to be careful of. Nothing was explained. The car looked the same to me when we returned it. It was basically their word against ours and they were threatening us that we would not make our flight if we tried to argue. Told us we could get reimbursed by our insurance company at home – which was complete baloney; it was just them trying to get us out of their office. He told us that if we just pay him the money then we could board our plane, go home, and “life would go back to normal.” We are very upset. We ended up being charged an additional 1000 euros, which was more than our airplane ticket. It was a total scam. Would not recommend SADcars at all.

    • Randy Kalp -

      February 28, 2014 at 8:08 am

      Hi Liz,

      I’m so sorry to hear about what happened to you. That’s absolutely horrible! I really appreciate that you took the time to share your story with us and our readers.

      Best wishes,


      • Mimi -

        March 31, 2015 at 5:11 am

        Have you heard any other bad stories about SAD Cars? I am needing to rent a car this week and was thinking of renting from them…but not not so sure?

  • Jade -

    November 5, 2013 at 8:18 pm

    Thanks! I was looking for a cheap car rental and found SADcars on my own, but was going to do more research until I noticed you mention it is the cheapest. So we booked it! And we didn’t get any extra insurance… lol

  • Route 1 Car Rental -

    January 16, 2014 at 1:24 am

    Hello beersandbeans!

    Like you mentioned in your article then the prices a highly depended on the time of year, but I would like to point out that we at Route 1 Car Rental often times offer cheaper cars than Sadcars. In the period July 2nd to July 6th, for example, we offer a Toyota Yaris at almost half the price that Sadcars lists on their website.

    What you do not mention in your article is that Iceland has no official road assistance service. To counter this fact we at Route 1 Car Rental offer new models and make sure that all of our vehicles kept in a very good condition to insure that our costumers always feel safe on the road. Older vehicles are, unfortunately, more likely to break down and it would be an absolute bummer to be stuck out in the middle of the highland with no road service to assist you.

    Hope this comment has been insightful and of assistance to anyone who are considering traveling to Iceland.
    Route 1 Car Rental

  • Tom -

    January 20, 2014 at 2:20 pm

    I would like to mention that it is important to compare the prices of car rental in Iceland as the differences can be huge

  • Tran -

    February 27, 2014 at 1:59 pm

    Hi, Should we get a GPS system??

    • Randy Kalp -

      February 28, 2014 at 7:53 am

      Unless you plan to travel off road, then I don’t think you need a GPS. The Ring Road is just one big circle and the small towns/villages along the way are easy to navigate.

  • Marleija -

    June 12, 2014 at 10:27 am

    I will be in Iceland in September and this blog has been more helpful than the 1826348362 websites I have visited so far. Thank you!

    Can anyone out there list some hostels or reasonably priced overnight spots along the drive from Reykjavik throughout Westfjords? And is sleeping in the car scoffed upon as it is here in the U.S.?

  • Dale -

    December 16, 2014 at 11:15 am

    Hi. We are visiting Iceland in the first week of February and are looking at hiring a car. We will most likely stick to the main roads, or the from the maps what looks like Route 1, Route 35 and Route 36, mainly around Reykjavik and the Golden Circle. Would we need a 4×4 or a larger type vehicle, or would a small car (Volkswagen polo or similar) be alright? How icy and dangerous will these roads be?


  • Lejla -

    January 15, 2015 at 9:12 am

    Thank you for these tips! Saved me tons of time and money!

  • Jessica -

    February 13, 2015 at 10:46 am

    Love the post! So informative! I am planning a trip for 2016. I was wondering – what sort of paperwork is needed when renting a car in Iceland. I have a U.S. drivers license, will I need to go through a lot to get them to rent a car to me?

    • Randy Kalp -

      March 31, 2015 at 2:19 pm

      Great question! In addition to your U.S. drivers license, you may also want to look into an international driver’s license from AAA. I’m not sure if it’s mandatory or not, but I do remember showing ours when we rented a car from Hertz, so there’s a chance other Iceland rental companies may require it. The IDL is cheap and easy to get, here’s more info: http://www.aaa.com/vacation/idpc.html.

      One other thing to keep in mind is age requirements. According to Hertz, Iceland law says: “a driver must present a valid driver’s licence held for minimum of one year at the time of rental. The minimum age for rentals in Iceland is 20 years for passenger car. For 4WD and minibuses the minimum age is 23 years.” Have a great trip!

  • Gina Shah -

    January 7, 2016 at 3:35 pm

    What were your experiences of parking? Are there enough spaces at tourist destinations? Is it expensive?

    • Randy Kalp -

      January 12, 2016 at 10:33 am

      Hi Gina,

      Outside of Reykjavik, you should have no problem parking at all. Even Reykjavik shouldn’t be that bad. Have a great trip!

  • Jenny Shulskie -

    January 12, 2016 at 12:10 pm

    Hello! My husband and I are taking our honeymoon here in March- would you say 4WD is a necessity when renting a vehicle?

  • Sonja -

    February 3, 2016 at 6:36 am

    Please correct your bottom note as there is public transport outside Reykjavik other then tour-buses. But that transport takes a lot of time and is not very frequent but it is there, mostly under straeto.is (http://www.straeto.is/english/popular-destinations/)

    Thank you.

  • Kyle -

    July 6, 2016 at 5:51 pm

    Good tips, after renting a car recently in Iceland (your tips helped) I would add a couple. First consider a 4×4, it can be very helpful if you want to go to some out of the way places. Second I would say to think about music, there is very little radio as you get away from Reykjavik and you will be happy to have a CD or 2 or satellite radio to help break the silence. Check out my post to see my new post on a similar concept!

  • Thomas -

    July 9, 2016 at 4:27 am

    Hi, just found your page when looking around for reasonable priced rental cars. Sounds all good to me, just that scam story from SADcars…
    One note though. I was travelling many years ago (2001) in Iceland, at that time we’ve been cycling. There have been other possibilities of getting around. Car is certainly the most flexible and comfortable way, but there is public transport outside of Reykjavik. Post busses connect towns and villages, and at that time you could even buy a bus ticket where you have been able to hop on and off for one month.
    E.g., there is a little place in the middle of F35, Hveravellir where certainly Post busses stop. The busses would connect Selfoss and Blönduós…