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Cheapest Car Hire Rates in Iceland
Iceland
Mini
Fiat 500 or similar
4
1
3
A/C
Auto
€ 24
per day
Iceland
Economy
Toyota Yaris or similar
5
2
5
A/C
Auto
€ 29
per day
Iceland
Compact
Volkswagen Golf or similar
5
3
5
A/C
Auto
€ 33
per day
Iceland
Intermediate
Skoda Octavia or similar
5
4
5
A/C
Auto
€ 39
per day
The average cost of car hire is €34 per day, with 1,878 vehicles available and an average hire duration of 6 days.
Why Rent a Car in Iceland?
Iceland, the land of fire and ice, offers breathtaking landscapes, from glaciers and volcanoes to waterfalls and black sand beaches. While guided tours and public transport are available, renting a car provides the ultimate freedom to explore this Nordic gem at your own pace. Discover why a rental car is essential for experiencing the best of Iceland.
Unparalleled Freedom and Flexibility. Iceland's Ring Road and numerous scenic routes are best explored without the constraints of fixed schedules. A rental car allows you to stop at hidden waterfalls, hike remote trails, and chase the Northern Lights on your own terms.
Access to Iceland's Hidden Gems. Many of Iceland’s most stunning locations are off the beaten path. Public transport rarely reaches the remote highlands or the Westfjords. With a rental car, you can access these untouched landscapes and experience the true wilderness of Iceland.
Comfort and Convenience. Iceland’s weather can be unpredictable. A rental car provides a warm and comfortable shelter as you navigate the varying conditions, ensuring a pleasant journey regardless of the elements.
Cost-Effective for Groups. For families or groups, renting a car is often more economical than booking multiple tours or relying on expensive private transfers. Splitting the rental and fuel costs makes exploring Iceland affordable and enjoyable.
Driving in Iceland: Rules, Tips & Local Regulations
Drive on
Right hand side
Speed limit within city centre
50 km/h or 31 mph
Languages
Icelandic
Average petrol price
£1.90 per litre or £7.20 per gallon
Speed limit outside the city
90 km/h or 56 mph
Currency
Icelandic Króna
Acceptable limit of BAC
0.05%
Score
8.9/10
Dialling Code
+354
Driving in Iceland offers incredible experiences, but it’s essential to familiarize yourself with local rules and regulations for a safe and enjoyable journey. From navigating gravel roads to understanding speed limits, here's what you need to know before you hit the road.
1. Gravel Roads Many of Iceland's scenic routes, especially in the highlands, are gravel roads. Reduce your speed to avoid skidding and potential damage to your vehicle.
- Check road conditions before travelling
- Consider a 4x4 vehicle for highland roads
2. Speed Limits Speed limits are generally 50 km/h in urban areas and 90 km/h on paved roads in rural areas. Speed limits are strictly enforced, and fines for speeding can be substantial.
- Pay attention to posted speed limits
- Adjust your speed based on weather conditions
3. Seatbelt Laws Wearing seatbelts is mandatory for all passengers in Iceland. Ensure everyone in the vehicle is properly secured before starting your journey.
- Law applies to all ages
- Fines for non-compliance can be issued
4. Headlights Iceland requires headlights to be on at all times, day and night. This regulation increases visibility due to the country's often cloudy and foggy conditions.
- Automatic headlights are helpful
- Check that your headlights are working properly
5. Parking Pay attention to parking signs, especially in Reykjavik and other towns. Parking in restricted areas can result in fines and towing.
- Use designated parking areas
- Pay for parking where required
Top drives in the Iceland:
Iceland is best explored by car, offering unparalleled freedom to discover its diverse landscapes and hidden gems.
From the iconic Ring Road to the rugged Westfjords, a rental car allows you to experience Iceland's natural beauty at your own pace. Embrace the adventure and create unforgettable memories on these scenic routes.
Car Rental Prices in Iceland – Cost Breakdown
Estimated Daily Prices
Business:
from £50 / $63 / €61
Electric:
from £40 / $50 / €49
Classic:
from £30 / $38 / €37
Executive:
from £60 / $75 / €73
7 Seater:
from £70 / $88 / €85
Automatic:
from £35 / $44 / €43
SUV:
from £45 / $56 / €55
Hire Price
Average price for hiring a car per day in the Iceland
Seasonal Trends
Peak season (June to August): Prices start at approximately £80 / $100 / €98 per day*. This is the most popular time to visit Iceland due to the mild weather and long daylight hours.
Low season (November to February): Discounts available from around £40 / $50 / €49 per day. While the weather can be challenging, the Northern Lights are a major draw, and car rental prices are significantly lower.
*Please note that these prices are approximate and can vary based on factors such as vehicle type, rental duration, and location
Tips for saving money when renting a car in Iceland
Renting a car in Iceland is essential for exploring the country's stunning landscapes, but costs can quickly add up. Here are some smart ways to save money on your car rental while still enjoying the best of what Iceland has to offer.
1. Book Early for the Best Deals.: Rental prices tend to rise closer to the pick-up date. Booking several months in advance can secure better rates and a wider selection of vehicles.
2. Compare Prices & Look for Discounts.: Use price comparison websites to find the best car rental deals. Look for discounts offered by travel agencies, credit card companies, or membership programmes.
3. Choose the Right Car for Your Needs.: Consider a smaller, more fuel-efficient car if you're primarily sticking to paved roads. A 4x4 is essential for highland roads but will cost more to rent and fuel.
4. Check Insurance Options Carefully.: Assess your existing insurance coverage (travel insurance or credit card benefits) before purchasing additional insurance from the rental company. CDW and SCDW can add significantly to the rental cost.
5. Stick to a Single Driver.: Adding extra drivers often incurs additional fees. If possible, designate one driver to minimise costs.
6. Refuel Before Returning.: Rental companies typically charge exorbitant rates for refuelling. Fill up the tank at a local gas station before returning the car to avoid these fees.
What Do You Need to Rent a Car in Iceland?
Renting a car in Iceland is a straightforward process, but you'll need to meet specific requirements before getting behind the wheel. Here’s what you’ll need to ensure a smooth rental experience.
Valid Driver’s License. A valid driver’s licence from your home country is typically sufficient for renting a car in Iceland. If your licence is not in English, an International Driving Permit (IDP) is recommended.
Minimum Age Requirement. Most car rental companies require drivers to be at least 20 years old, although some may have higher age restrictions for certain vehicle types. Drivers under 25 may be subject to a young driver surcharge.
Credit Card. A valid credit card in the main driver's name is required for the security deposit. The credit card must have sufficient available credit to cover the deposit amount.
Passport or ID. A passport or another form of government-issued identification may be required, especially for international renters, to verify your identity.
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This content was written, fact-checked, and/or translated by our expert team of content creators.
Every piece of information on this page has gone through our Content Quality Assurance (CQA) process — a multi-step review that includes human editing, localisation accuracy checks, and expert travel validation.
Learn more about our Content Quality Standards
This page was edited, fact-checked, and/or translated by our experts who are passionate about helping travellers experience the world by car. Our team of seasoned travel writers and editors has driven across more than 50 countries, hired cars on six continents, and explored countless scenic routes — from Icelandic fjords to Moroccan deserts.
Our Customer Reviews
Our clients rate such place as Iceland as
To ensure every review is from a real customer, we do not allow reviews to be posted directly on this page. Instead, we invite every customer to leave a review after they have returned their hire car. This way, you can be sure that all reviews are authentic.
Pretty good, really
Sarah Jones
Reviewed: 12.07.2025
Really cool, yeah
Chloe Brown
Reviewed: 15.10.2024
Pretty sweet, really
Liam Miller
Reviewed: 17.08.2024
Iceland was stunning, a whirlwind business trip made easier by having a car. The Blue Lagoon was incredible, though the hotel food was a bit bland.
Evelyn Garcia
Reviewed: 12.01.2025
Absolutely breathtaking! A quick weekend trip, but exploring Iceland by car was perfect.
Oliver Davis
Reviewed: 09.05.2025
Pretty scenic, I guess
Ava Wilson
Reviewed: 04.11.2024
Pretty chill vibe
Ben Carter
Reviewed: 18.06.2025
Pretty chill, eh?
Mike Smith
Reviewed: 05.08.2025