Renting a Car in Iceland

We spent a week exploring Reykjavik and the southern coast of Iceland by car in March 2016. This is our experience and tips for renting a car in Iceland. 

Sunrise in Keflavik, Iceland

Sunrise in Keflavik, Iceland

Where should I rent a vehicle? 

The first decision in booking a car in Iceland is deciding on where to pick it up. Most car rental companies will have an office in Keflavik near the airport, or 40 minutes away in Reykjavik. On any search engine you will probably find that car rentals are cheaper in Reykjavik, but when you factor in the price of transport to and from the airport it may be cheaper to just rent at the airport like we did.

The second thing you must decide is what kind of vehicle to get. If you are visiting in winter and plan on going outside of Reykjavik I would recommend getting a vehicle with 4 wheel drive. We ended up going with a Honda CR-V which ended up costing $511 for 8 days ($63 USD/day).

honda crv iceland

Our Honda CR-V on the Ring Road

What company should I use to rent a vehicle in Iceland? 

We booked through a company called Green Motion. We thought we needed to call for the shuttle when we landed, but since they had our flight information they were there already waiting shortly after we landed. The shuttle ride to Green Motion was about 5 minutes to their location near the airport.

You will need your drivers license and passport in hand to pick up your vehicle. They do not require an International Drivers Permit. Like most car rental companies in Iceland you will need a credit card, not debit card to book a car.

vik beach iceland

Black Sand Beach, Vík

Should I get extra insurance? 

That is completely up to you! Green Motion asked us if we wanted extra insurance on the Honda CR-V. We knew that our travel insurance and car insurance at home covered us, so we declined without listening to all the options. This was a bad decision.

We could have paid about $10 USD/day for gravel protection. There is loose gravel ALL OVER Iceland, especially over snowy passes. We weren’t aware of some of the road conditions in Iceland and we ended up paying for it later. We got a chip in the windshield and ended up having to pay over $700 USD out of pocket when we returned the car. If you don’t get any other insurance, GET THIS ONE! Sandstorm and Ash is another popular insurance add on (same price). Apparently sandstorms can get bad along the numerous black sand beaches that cover the coast.

They had additional insurance which may or may not be a good idea, it’s up to you the driver. Regardless of if you buy insurance through them know that there are some roads that are off limits to drive on. Well, you could drive on them but any damage you will have to pay out of pocket. The F-roads in the interior Highlands of Iceland are wild, gravel roads that are poorly maintained due to the crazy weather. Most of the river crossings on F-roads do not even have bridges!

reykjavik waterfront

Reykjavik waterfront

Do I need to rent a GPS?

We rented a Garmin GPS unit from Green Motion for $20 USD/day. It seems really expensive, but I don’t think we would have done well without it. We were told to leave the GPS in the Icelandic keyboard because the English keyboard wouldn’t have all the necessary characters to spell out street names.

Something that I hadn’t thought of was that the destinations would need to be spelled out in Icelandic for it to find the correct location. So when we were looking for the ‘Blue Lagoon’ it said no matches were found. We got directions from a nice baker at Kornið Bakarí and we learned that Bláa Lónið was Blue Lagoon. Our GPS was able to navigate us from there.

I don’t know if it would have been possible for us to navigate Iceland without a GPS. Our GPS unit went on the fritz our last 2 days though so I had to get directions on my iPhone when connected to WiFi. As long as I started the navigation while we still had WiFi and didn’t veer from the course it got us to our destination. This way is inconvenient but it’s free.

hallgrimska iceland

What is parking like? 

The price of parking varies by how busy of an area you are in. P1 parking lots or street parking are more expensive, and it goes down to P2, P3 and P4. Parking is free during certain hours (at night) and on weekends. Apparently you can even use your parking meter ticket in different zones, as long as you are not upgrading to a more expensive zone. So if you paid for 6 hours in a P1 parking and decided to go somewhere that was a P3 for an hour during that time you could just leave that meter ticket in your dash.

You can only pay with Icelandic coins, so make sure you have converted some money before parking. The parking meter had a spot to run a credit card but it wouldn’t read ours or other people trying to use the meter. We decided to chance it and leave our car parked without paying the meter while we grabbed coffee and converted some coins and we came back to a ticket on the windshield.

How do you pay a parking ticket in Iceland?

You can go to any bank to pay your parking ticket. The banks open at 9 AM and they are closed on Sundays. The parking ticket was about $20 USD. While at the bank this is a good place to convert some currency 😉


Iceland road signs

Iceland road signs

Is Iceland safe? 

We felt very safe the entire time we were in Iceland. The roads were really clean and there aren’t any panhandlers or homeless on the streets. In Reykjavik the streets are well light and the streets patrolled by police cars. It snowed a few times we were there, and the roads were quickly cleared. We didn’t encounter any ice in Reykjavik while driving, partially due to the geothermic-heated roads.

With the rapidly changing weather in Iceland it’s a good idea to check road conditions before you leave the city. We checked every time before we went out looking for the Northern Lights. It will tell you which roads are closed or may be icy.

Have a basic understanding of what the road signs mean in Iceland. This was our first time driving in a European country so it wasn’t like anything we had seen before. They drive on the right side of the road, just like North America so at least that wasn’t something new.

iceland ring road

Ring Road

What is the speed limit like? 

Be aware that the speed limit is rather slow (compared to American standards). The speed limit is usually 30 km/hr in town and up to 90 km/hr on highways and in the middle of nowhere (which is about 55 MPH).

I had read about speed cameras that are in town and even in the middle of nowhere. Jake didn’t believe me and went a little above the speed limit most of the trip. Finally on our last day he admitted that he thought I was right about the speed cameras, and pointed up to a random camera literally in the most remote area! I’m still holding my breath and hoping we don’t get a bunch of speeding tickets in the mail!

land rover iceland

Is renting a bigger vehicle easy? 

It’s not easy to find a large vehicle, and it’s more expensive than you’d think. For 3 days on our trip there were 6 in our party. We wanted a vehicle to get around Reykjavik as a group, but also to explore the Golden Circle. The rental company we had gone through didn’t rent a vehicle large enough to seat 6, so we ended up renting a Land Rover from Geysir Car Rental. Many car rental companies did not have cars that sat more than 5 people. We paid $270/day for the Land Rover which was one of the cheapest places we found! 

Geysir Car Rental had the cheapest price and dropped the vehicle off at the hotel the rest of our party was staying at for no added cost. However, they were an hour late and gave us no notice (Jake had to call).

We had another issue when Jake had forgotten his Ray-Ban sunglasses in the vehicle and didn’t realize it until we had returned it. Jake called and they searched the vehicle and said it wasn’t there. We knew that’s where they were so we ended up stopping by their location at the Harpa Concert Hall and they agreed to let us search the vehicle. The employee quickly looked around the front seats (which had already been cleaned) and said they weren’t there but we were welcomed to look. Literally within 10 seconds I had found the sunglasses lying between the center console and passenger seat. I don’t know how throughly the vehicle was cleaned if they weren’t able to find the sunglasses in that obvious location. We wouldn’t use Geysir Car Rentals again.

highlands iceland

Are gas (petrol) stations difficult to find?

You won’t have a problem finding gas stations in Reykjavik, some even had gas attendants who will pump your gas for you. We were very impressed with the quality of gas stations, especially Olís gas stations. In more remote areas this is often your only option for food, and thankfully they have some good options. Their pre-made sandwiches were good quality and they served our favorite coffee from Kaffitár. Randomly, we also found the best chocolate muffins we’ve ever had! Olís was one of the few places that reliably had free Wi-Fi too.

Some remote gas stations only take credit cards that have a chip. We didn’t have a credit card like that, but thankfully you can buy a gas card for pre-set amounts. Gas stations are more scarce the further east you get along the Ring Road, but we never got close to empty.

Gas is more expensive than in the US. We didn’t realize it at the time because they measure it by liters, but we were paying about $5.50/gallon in March 2016. Our vehicle was very fuel efficient though so it wasn’t a huge cost.

Our first night in Iceland

Our first night in Iceland we got lost in the countryside looking for Northern Lights

Is it worth it to rent a vehicle in Iceland? 

YES. A million times, yes. I don’t know if I would have loved Iceland half as much as I do if we hadn’t rented a car. Reykjavik is one of my favorite cities now, but it is only a small part of Iceland. To get outside of Reykjavik you will need to join a tour or get your own vehicle.  A tour is a good option for some, especially for those who are nervous about driving in the snow or maybe solo travelers. But for the majority, I feel like renting a car or even a camper is the way to truly see Iceland. 

Each leg of our journey we ended up pulling to the side of the road at least half a dozen times to snap pictures. We saw caribou in the wild, watched a flock of snow geese take off and fly over us, fed apples to Icelandic horses and finally found the Northern Lights. Those are the special moments that really make a trip, and in Iceland every turn around the bend is the opportunity for another special moment.



If you have any questions on renting a car in Iceland let me know in the comment section below or shoot us an email at [email protected]

13 thoughts on “Renting a Car in Iceland

  1. Great post and love the level of detail. I am heading to Iceland in July. Do you think its worth booking a car well in advance. Did you have trouble finding availability when you arrived? Also how many day do you think if takes to drive the around the ring road? I am trying to figure out how many days to have the car for as there will be only two of us and I don’t want to blow all our budget on just the car alone. Thanks in advance.
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    1. Thanks for the kind comment! We booked our car a few weeks in advance, I would book a car as soon as you know your dates if you’re going in summer since it will be the busy season. In fact, book everything as soon as you can. Accommodations book up really quickly too. We drove along the southern coast as far as Hofn (east coast) and back to Reykjavik and that took us 3 days. From what I’ve read most people recommend at least 7 days to drive the entire Ring Road. If you don’t have the time or budget to do the whole loop at least explore the southern coast, it is incredible!!

  2. Such a useful post. I would definitely have taken a 4 wheel drive, but had no idea about the gravel! We would love to go to Iceland with the kids, so will definitely bear all your advice in mind.

  3. Great post. I visited Iceland on a stopover in 2012 just for 3 days in Reykjavik but loved it. I definitely want to go back and see more of the country and I think a road trip is the perfect way to explore! PS: You night sky photo is so pretty!

  4. These are fantastic tips for anyone wanting to rent a car in Iceland. You speak from personal experience and have a great list of what NOT to do, as you learned the hard way. Gravel insurance – something we don’t often think of- a fantastic tip!!!! You also made the point that you stopped to take photos of the beautiful scenery around you, that is why renting a car pays off. When you are on a bus, the bus does not stop for those moments. Thanks for offering your insight into renting a car in Iceland.

  5. Wonderful post, full of useful detail – especially the part about the added insurance. Understand why you declined it — I always do as well. Learning from the experience of others is the cheapest knowledge you can gain. Thanks!

  6. I enjoyed reading this post – sorry you had a bad experience with both the gravel chip and the parking ticket! It sounds like you still had an amazing adventure. Iceland is definitely on my list to travel someday. 🙂

    1. Your best bet is to check with a rental company. Some companies will allow a young driver with an additional (large) fee. Maybe see if you can split the rental car costs with an older driver? I’m part of a girls travel group on Facebook called Girls LOVE Travel and there are ladies traveling to Iceland ALL THE TIME. You may check there? Best of luck!

  7. Did you end up getting the seeding tickets? My friend and I were racing around the golden circle trying to get to our next destination and now we are really concerned!

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