Car Rental in Iceland
Renting a car is highly recommended in Iceland. It’s the easiest way to get around outside of Reykjavik and will allow you the most freedom to stop when you want, and detour when you see something interesting. Once of the biggest draws of Iceland is the beautiful countryside, and it would be a shame to only see it whizzing by in the window of your tour bus.
Renting a car isn’t cheap though. Depending on the kind of car you rent, you can expect to pay about 10,000 ISK per day or more, plus the high cost of gas, about 200 ISK per liter. Manual transmission compact cars are the cheapest option, but not a wise one if you are visiting in winter or plan to drive on rougher roads (or if you can’t drive stick). If you want to visit the country’s interior, you’ll need to spring for a 4WD vehicle, which can cost you upwards of 150 euros per day for the cheapest model. If you want to upgrade to a Jeep, Land Cruiser, Range Rover or Hummer, bank on 250 to 350 euros per day. Prices are slightly lower in winter and discounts are available for longer rentals.
If you only the need the car for part of your journey, you can generally arrange to drop it off in a different location than you picked it up from, for a small fee.
Where to rent
There are dozens of car rental offices located all around Iceland. The easiest thing to do is simply pick up your car at the Keflavik Airport when you land in Iceland. At the airport you’ll find rental offices for Budget, Avis, Hertz, National and Sixt. Thrifty and Europecar are also available in Iceland, but I’ve been most pleased with the service at Geysir Car Rentals. There are also several rental offices at domestic airports, including the Reykjavik domestic airport.
We rented a Suzuki Swift (the lowest class you can get with a guaranteed automatic transmission (or book the Hyunai i30 if you want to take your chances and hope you get one of the automatics) for 390 euros for a week in low season from Geysir; the price goes up to 780 euros in summer. The cheapest car you can get, a manual transmission economy car, is 300/499 euros in low/high season for the week or 60/90 euros per day. Insurance and gravel protection are both extra, and both highly recommended. I’ve heard too many stories of renters being stuck with high bills after the undercarriage of their rental car was trashed by Iceland’s harsh gravel roads. The extra protection is only a few euros per day, and well worth it.
The service at Geysir was excellent. After walking five minutes from the arrivals terminal at Keflavik to their office, we were quickly set up with a car and a great map from the helpful agent, who also took the tip to give us several tips about the area’s we’d be visiting on our trip. We arranged to have the car picked up from our hostel in Reykjavik, as we’d be staying in the city a few days longer and didn’t need wheels, and found the whole process painless and smooth.
Driving in Iceland
Icelanders drive on the right-hand side, and most roads signs are easily understood. There’s really no traffic in Iceland (except in Reykjavik) and drivers usually very courteous. The biggest dangers when driving in Iceland are high winds, loose gravel which can cause your car to spin out or slide off the road, flash floods, blind curves, whiteouts, and narrow bridges.
The roads in the interior are only open during summer, and you must have a 4WD vehicle to take your car on those roads, or you’ll face steep fines. ,