Iceland Car Rental Guide

When renting a car in Iceland, there are several factors to consider, as conditions here are most likely very different from what you’re used to. During the winter it can be snowy, icy or rainy, and in the summer the sun is out all day long. How does this affect your driving?

During the summer, you can probably get away with a smaller car, especially if you intend to travel in an area close to the city. In the winter, however, 4WD and studded tires are essential.

The further you get away from the city, the more likely it is that you will be driving on gravel roads which have their own set of peculiarities.

Generally speaking, renting a car is a great way to save some money if you’re two or more people travelling in the summertime, but in wintertime, you may want to do away with the intricacies of driving in an Icelandic winter and just go on some day tours.

This depends a bit on the company. Generally, as long as you have a driving licence, you can legally rent a car. Some companies only rent to over 21-year-olds since younger people are the most likely to have accidents.

If you’re younger, they may not rent to you, or they may ask you to pay for extra insurance or leave a deposit.

If you’re out in good time, there are very good odds we can find you a rental car even if you’re younger than 21. Just contact us.

This depends on the season. In summer it’s good to book at least 2 weeks in advance, but it’s probably safer to book a whole month before. You have fewer, more expensive options if you wait longer, and you may not get a car if you wait longer.

During the winter it’s not as rushed, but over the Christmas/New Year’s holidays and into January it can be quite busy. The winters are always getting busier and busier too, so the sooner, the better.

That depends entirely on what kind of car you get, and where you rent it. What’s On works with many reliable Icelandic car rentals that offer quality cars in reliable condition and good service, and you can see the price range in the rental booking portion below. For more options, send us an email or write to us on live chat, but the price range will be similar to the one below.

That depends on what you compare it to. Any industrialised country where you rent a car for several days will cost a bit of money, though there are countries where everything, including car rental, is cheaper.

When you compare the price of a car rental with guided tours, especially for two or more people, you usually end up saving money.

Also: you get what you pay for

It also depends on which car you get (see below) and whom you rent it from. A lot of the time, it’s a good idea to pay the price for a quality product. There are many car rentals in Iceland, but What’s On, being a neutral third party, can vouch for the cars and service of all of our car-rental partners. Contact us for additional options to the ones available online.

What kind of car you should get depends on the season, where you’re going and on your budget.

In the winter you need studded tires (the smallest models might not have these), and we recommend 4WD for safety.

In the summer you can get away with a less hefty vehicle. (Unless you’re going to the highlands, such as Landmannalaugar, Thorsmork and such routes. They are actually illegal for non-4WD vehicles.)

In addition to this, you might want to give some thought to your comfort – if you’re spending 7 days driving, you might want to spring for a little extra leg room, and/or a car that feels good to drive for days at a time.

Use the widget below to see prices and book different models.

What kind of insurance do I need with my Iceland Car rental?

Specific insurance packages depend on the rental agency, but there are some trends. All rental cars usually come equipped with a Collision Damage Waiver.

CDW – Collision Damage Waiver:

This is some very basic insurance which varies from agency to agency but generally has a fairly high deductible. This means that if the car gets wrecked or damaged, you have to pay for the first … usually several thousand dollars, and after that, it’s covered, so you don’t have to pay the whole thing.

In addition to the CDW, most agencies have several potential ad-ons.

SCDW – Super Collision Damage Waiver: Not boring a superhero, the SCDW usually brings your deductible (the amount you have to pay yourself) significantly down. Often by like 70%. Please note, SCDW often doesn’t cover chassis damage, such as a large rock hitting the underside of your car. Ask about this. Some agencies might have additional chassis insurance too.

Windshield/gravel insurance – there are many different versions of this. It is basically for small nicks and scratches that will never reach your deductible but can still be considerable amounts, such as paint scratches, dings and windshield scratches. Can be highly advisable since considerable parts of the countryside road system are gravel roads.

Sand and ash insurance – if you’re going to the highlands, you may be advised or required to get sand insurance. This is because the desert highlands sometimes get sandstorms that can strip the paint off your car, and the rental companies are not fond of that. Ash insurance sounds like a bit of a joke to me, but I guess you might be grateful for it if a volcano erupted nearby. In any case, they are usually lumped together.

Theft insurance – You might have heard that crime is almost unheard of in Iceland. And it is. It’s unlikely though not impossible, and you would be happy you had this if something happened. You might be covered for theft by your travel insurance though. In any case, this is often lumped in with other things in a package, so it doesn’t hurt to have.

Insurance packages – many agencies have packages with more than one thing (say, SCDW, Gravel protection and sand & ash) for a much lower price. This can be a great deal so look out for these.

Wait a minute – doesn’t my credit card cover me for insurance? Some credit cards cover you really well. That’s for you to find out about. Often, they will cover your deductible as long as you pay the whole rental with the credit card and don’t buy any additional insurance.

What this means: let’s say a car is badly damaged. The deductible is $2.500 USD, but the damage is $10.000. This means the customer pays 2.500, the insurance pays the rest. But if they paid with some major credit cards, the card company will cover the $2.500. Prepare for your trip by finding out about your credit card coverage!

Please Note: YOU ARE DEFINITELY NOT INSURED for driving through rivers. As far as I know, it’s impossible to get insurance for this. If driving through rivers never occurred to you, great. However, to drive to some places such as Thorsmork, you need to cross rivers. If you want to do that, that’s at your own risk. We tend to recommend taking a tour there.