Latest update: 17 December 2024
In Iceland, you can’t avoid it: you have to rent a car. There is little to no public transport. And I don’t think sticking to tours from Reykjavik is an option either: unaffordable! So I recommend renting a car in Iceland. I’m happy to share my tips with you.
Well-insured car rental in Iceland
If you’ve ever rented a car, you know what a drama it can be at the pick-up counter. Lots of paperwork (okay, you can’t avoid that) and hassle about extra insurance. You can avoid it, though. My favorite car rental company is Sunny Cars because they care for everything. So I say ‘no’ with conviction to all the extra insurance they want to sell me. Because the deductible is already covered and all necessary insurance is included. Also, the glass-tire-bottom-roof damage cover (nice word for hangman) is useful in Iceland because there are quite a few rocks on the road, and the bottom of the car has to endure a lot. We have seen a few people with flat tires along Icelandic roads, so it is not an unnecessary luxury.
You do have to pay the damage costs to the rental company, but you can then claim them back from Sunny Cars.
The Sunny Cars website is also available in English, so if you’re not Dutch you might want to check them out too. Otherwise, compare prices and insurance coverage at Discover Cars and Rentalcars.com.
Younger than 25 or just got your driver’s license?
If you want to rent a car in Iceland (and you do), you must be aware of a few things. You must be at least 20 years old, sometimes even 25, and you are asked to have your driver’s license for at least a year. There is sometimes a surcharge for younger drivers. So please read the conditions carefully before you rent a car. Fortunately, you can cancel free of charge with Sunny Cars if you find out too late.
Icelandic roads
The roads in Iceland are quiet and easy to drive, although they can get busier in the summer because it is high season. It is also busy in and around Reykjavík. Otherwise, you can cruise and enjoy the landscape. I drive along the mountains with snow-capped peaks, and I regularly spot a waterfall and small rivers flowing along the road – although they are sometimes still frozen. This is a very easy and comfortable drive.
Because the weather can change so quickly in Iceland (which sometimes causes roads to be closed), it is smart to check Road.is for the current traffic situation.
I generally find driving in Iceland quite easy, but it is a bit more challenging on dirt roads. The roads are mostly single-lane roads. I think they are quite narrow by Dutch standards. We are used to having a bit of a hard shoulder along the road and crash barriers. That is not the case in Iceland.
Sometimes, the road narrows when you have to cross a river. When overtaking, you always have to be careful not to have oncoming traffic.
Rent a 4×4 car in Iceland?
The Ring Road, the road that goes all the way around the island, is just a well-paved road. If you leave it for some sightseeing, you can sometimes end up on dirt roads. That’s why I really recommend renting a 4×4. Officially, you’re not allowed to drive on the longer unpaved and rocky roads with your regular rental car. You’re not insured. You can drive the short stretches of gravel roads to sights with a regular car. But occasionally going a little off the beaten track is fun, so I prefer a 4×4. It also feels safer. My best friend and I rent a Dacia Duster with a very kinky license plate if you know Dutch.
Driving in winter
A 4×4 is also much more comfortable to drive in the winter months. I’m there at the end of March and the beginning of April, and I still encounter snow and ice on the roads. I am not used to driving in these conditions, so I am glad that we went for the slightly more expensive 4×4 from Sunny Cars.
Winter tires are mandatory in Iceland from October 15 to May 1. Sunny Cars automatically adds them if you rent a car during this period. Handy, because I had not thought that it would be necessary in April! In the depths of winter, you also need snow chains.
Take note of these traffic rules
The Dutch traffic rules are similar to the Icelandic ones, but there are a few things that you need to pay attention to.
- It is mandatory to always turn on your headlights and taillights.
- You are not allowed to drive off-road. This is to protect the vulnerable nature.
- On gravel roads, you must slow down when oncoming traffic to reduce the amount of gravel flying around.
- You are not allowed to park ‘the wrong way’ – against the direction of traffic.
- Parking is not allowed on a yellow line. You are permitted to stop for a while on a broken yellow line.
- At the roundabout, the inner lane has priority over the outer lane.
And keep to the maximum speed. There are controls, and a fine is expensive! I read online that they could be as high as €400 to €600. These are the maximum speeds in Iceland but also pay attention to the signs along the road.
- Within urban areas: 50 km/h
- Asphalt roads outside urban areas: 90 km/h
- Gravel roads outside urban areas: 80 km/h
Parking in Iceland
It is often said that parking in Iceland is free, but I would certainly not dare to claim that. You will hardly notice the claim as a tourist because you must pay parking fees at almost every attraction. In the cities and villages, parking is often free, but pay attention to where you park your car, especially in Reykjavik.
You pay at a parking meter or the Parka app. It is tempting not to do it because the amounts can add up if you visit multiple attractions in one day. But even though there are usually no barriers or inspectors, it is not based on good faith. Automatic scanners check whether you have been in the area.
Navigating through Iceland
Everything is well signposted along the roads. But how can you do without navigation these days? Many cars now have built-in navigation, or you can connect your phone to the car. It is useful to take a small cheap phone holder with you if you cannot connect your phone to the car. For example, it took us two days to figure out how to get the map shown on the car screen. Oops. Here are some options at Amazon.
Download the map on Google Maps at home. Sot that if you lose your connection, at least you are not completely lost. Here is an explanation of how to do that.
While you are downloading, also download some playlists on Spotify. Sometimes, the radio cuts out when you are out of range, and then having your own music is nice. Lonely Planet has created a cool Iceland Road Trip playlist.
Fuel up in Iceland
The most important tip about refueling in Iceland is to refuel on time. When we drive from Vík to Höfn with a few stops, we come to a stretch where no gas station is along the road for 100 kilometers. Radio off, heating off. With clenched buttocks, we arrive in Höfn. I have never been so happy with a petrol station.
So don’t take the risk and make sure you always have enough petrol or diesel in your rental car. Also, some petrol stations close in the evening, so better safe than sorry.
You won’t be able to get cheap petrol in Iceland, but you can check this site for the current prices. Orkan and N1 are often the cheapest.
There are both crewed and uncrewed petrol stations in Iceland. You can pay almost everywhere with your Maestro bank card and with Visa and Mastercard credit cards. If you refuel at an uncrewed petrol station, you sometimes have to enter a maximum amount. If you refuel less than that amount, less will, of course, be debited.
There is often a free toilet at the crewed petrol stations. Very welcome with those long distances!
More Iceland inspiration?
Useful links for your Iceland trip
- Accommodation. Favorite remains Booking.com. Would you rather stay in a hostel? Check Hostelworld.
- Activities. Book the best tours and activities at GetYourGuide, Klook and Viator. ‘Free’ walking tours can be booked at Freetour.com or GuruWalk.
- Car rental. If you want to compare more prices, try Discover Cars and Rentalcars.com.
- Guidebooks. I like paper travel guides to flip through, available for sale Amazon and others.
- SIM card. Beware of unexpectedly high phone and internet costs. Buy a local SIM card when you arrive, or arrange one online via Airalo.
- Flights. Compare all your options! Be sure to check out Trip, Skyscanner, and Kiwi.
- Package deals. Rather go on a catered trip? See what Expedia or CheapOair has on offer.
- Yoga retreat or horseback riding vacation. Or treat yourself to a yoga retreat in Iceland or a horseback riding vacation.
Some of the links on this site are affiliate links. If you buy something through these links, I might receive a small commission.
I got part of my car rental sponsored by Sunny Cars. They gave me complete editorial freedom.
First published: May 2024. The article has been updated since.
