Renting a car in Iceland – Insurances needed, cost in general, overall tips

Jun 26, 2018

Photographed in Iceland

A complete guide on renting a car in Iceland and staying safe in the land of fire and ice.

We always suggest pre-booking when renting a car in Iceland and to do so two to four months in advance – especially when you plan on traveling Iceland during high season. The cheaper cars (particularly 4x4) are renting out pretty quickly, so we do recommend some pre-planning. Rather, opt for Icelandic rentals (Geysir Cars or Route 1, even cheaper would be Budget Cars and if you go for a 4x4 then Cheap Jeep is a good option) since they tend to be less cost-intensive than Hertz and co at the counters at the airport. If you definitely want to go see the highlands then make sure you opt for an all-wheel drive or, even better, a jeep. You can pick up your rental car at the airport or in downtown Reykjavik – whatever makes most sense for you and your itinerary. Simply google 'car rentals Iceland' and you will stumble upon countless offers. (If you want to do a little research and compare some prices then 'Guide to Iceland' is a great site to do so.) Be aware that a lot of Icelandic roads are so called F-roads (dirt/gravel roads) and that it is forbidden to drive them with a regular car. In late autumn and winter you will have very limited access to even the regular roads and might literally be stuck without a 4x4.

If your wish is to go see more of the glaciers, volcanoes, fjords and overall roam a little off the beaten path then definitely prioritise towards a more expensive car and invest into something suitable.

By experience: we didn't book a jeep when we first visited the country and had to hike 20km to visit the Surtshellir caves, for example. Not that it wasn't fun but with limited time on our hands we had to get to terms with the fact that we didn't even see half of what we wanted to see because of our choice of car. Also, make sure you book all the additional insurances like gravel and sand storm package. Usually, we aren't the ones to book every single insurance available but if you don't in Iceland then it might actually cost you A LOT of money. We heard more than one story where someone didn't bother getting such insurances and then looked 'a proper Charlie' when the car got sandblasted in the next summer storm. You might wanna compare some external insurance offers (online) and then decide for whatever feels best and safest for you. (We do suggest booking with the rental, though since you never know if the external insurance really covers all damages.)

 

Stay Safe!

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Age and type of license.

If you want to rent a car in Iceland you have to at least be 21 years old (some accept 20 year old drivers) but you best check the regulations on the rental's homepage to know the exact requirements (in some cases it costs an extra fee if the driver is under 25). To rent a jeep you have to be at least 23, sometimes 25, depending on the rental. In every case you have to at least had your license for a year to be able to get a car. You don't need an international drivers license if you own a license issued by the USA, Canada or European Economic Area. Otherwise, an international license would be recommended. By the way: there are rentals that offer used cars (for example sadcars.com or faircar.is) We haven't tried it, yet, but we only heard good things and with such rental you can save up to 50% compared to a regular one.

three things to keep in mind in order to stay safe while driving in Iceland

suitable car

Weather

Road conditions

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Please don't underestimate the road conditions, ever!

The traffic laws are similar to for example Germany (and other European countries). You drive on the right side of the road and overtake on the left. The speed limit might be quite different to what you are used to, though. In populated areas it's 30 – 50 km/hour, on the ring road (which would be the Icelandic “highway”) it's 90 km/hour and on gravel roads it's 80 km/hour but you will probably drive somewhere around 40 – 50 km/hour on such roads since they can be super difficult to drive. Driving after enjoying alcohol is strictly prohibited and very (!) expensive if you get stopped by the police. Also, off-road driving is illegal!

It's very likely that you will experience Icelanders to be driving faster than the speed limit. With them being in a hurry and you wanting to gaze at the beautiful nature it can lead to problematic situations. We therefore advise you to not step on the brake while driving to see yet another breathtaking waterfall on the side of the road since situations like that keep causing terrible accidents. So if you spot something of interest (and you most likely will, every ten minutes :)) then stop in one of the countless safe spaces to park directly by the road to take in all the beauty and let the other cars pass by.

When it comes to most of the Icelandic roads - they will be rougher, narrower and more hazardous than back home. There are lots of small bridges only one car can pass at a time, sometimes you might have to cross rivers or experience extremely icy roads – so be extra careful when leaving the ring road or experiencing bad weather conditions while driving. (And even the ring road is partly gravel in the eastern part of the country and the west fjords.) We will give a little more insight into the specific winter related details when traveling the country in our comprehensive Iceland Travel Guide, but in general you can drive the ring road all year round while most of the other roads are only passable in summer. Iceland is a very wild and rough country and the road conditions are accordingly. So we always, always, always recommend an all-wheel drive even for a simple circumnavigation around the island. We definitely would never drive the highland roads with a regular car since that's way too dangerous and can cost a fortune (especially since it's not even allowed to drive a rental that isn't a 4x4 on F-roads). One thing we can't stress enough: take closed down roads very seriously! It happens, again and again, that people interpret those signs as suggestions and not as an interdiction and pay with bad injuries or even their life! If you want to see areas like Þórsmörk then definitely get a jeep! You have to cross a massive river, and we heard of so many drivers and cars that couldn't handle it and got carried away in the stream. (We would even recommend booking a tour to see this specific spot.) Same goes for the highlands – book a jeep at all cost!

Icelandic Rescue Association

One more tip according your safety: the Icelandic Rescue Association released a safety app for travellers. It's a service that traces your steps and route via GPS and can easily locate you in a case of emergency. If you seek finding really remote places this can be a true life-saver. (Something to consider for all hikers, as well!)

Hvalfjörður tunnel

If you are going west (or drive around the island counter-clockwise and then reach the greater Reykjavik area coming from west) you will have to drive through a tunnel which costs a small fee of 1.000 ISK - so make sure to have those (or sour credit card) at hand. You can also drive around the fjord but that means a 45 – 60 mins detour.

Navigation System

You don't necessarily need a navigation system as you can easily use your internet on your phone and rely on (google) maps. Even in the highlands you mostly have good reception and should be fine without a navigation. Find more super helpful tips on renting a car and driving in Iceland at guidetoiceland.is

How much does renting a car in Iceland cost?

If you go for a jeep you should think 100€/120$ a day, a regular car will be less expensive (with the absolute cheapest you can get being somewhat around 40€/50$ a day). Real big jeeps can be up to 250€/300$ a day but of course it all depends on your budget and what you plan on doing in Iceland. Insurances cost around 15-20€/20-25$ a day and a second driver is not necessarily included. In summer, you will most likely pay twice of what you would pay in winter. On websites like “Guide to Iceland” you can compare cost, directly book your car and get some advice which insurances you should definitely book according to your travel dates.

Don't underestimate the cost for gas since the drives can be very long and dragging, you will most likely stop and stare again and again and find yourself on detours more than once. The gravel roads eat a lot of gas due to all the stop and go, as well. So driving around the island can quickly add up to hundreds of Euros/Dollars and you should keep that in mind when planning your budget. The price for gas varies but all in all it's similar to European prices with around 200ISK the liter. In summer, you will most likely pay twice of what you would pay in winter.

Fueling up in general (and in the highlands)

Icelanders pay directly at the gas pump but those don't always accept international credit cards. You can of course walk in and pay the amount you wanna tank at the cashier and then use the pump but since a lot of pumps in the countryside are not manned we recommend buying a gasoline charge card which you can get can at most of the big gas stations. It's similar to a money card so you just insert the charged card into the fuel pump, then select the amount you want to fuel in and are ready to fill your car up. Beware though, you buy those cards at the manned stations and will then be able to use said cards at unmanned pumps all over the country  but only if they are from the same company. (So if you buy a card at one of the purple ORKAN stations you can only use it at the ORKAN pumps.) Best, you always fuel up completely before going on a longer trip and then refuel as soon as you arrive in the next big town - if you want to be super pro you even bring a full gas can. (Just in case, especially if you hit the highland roads.)

If you don't want to rely on such cards then make sure your credit card is accepted by the fuel pumps (you do need your PIN) first, in that case you should be fine.

 

If you are looking for further information on traveling Iceland...

...then you might wanna check out our extensive and utmost comprehensive 'Iceland Travel Guide'. Find everything from accommodation to sight seeing, natural hot springs, Northern Lights, restaurant recommendations, packing lists and way more, right over here:

Happy roadtrippin'!

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Renting A Car In Iceland, Car Rentals Iceland, How old do I have to be to rent a car in Iceland, Rules and Regulations when renting a car in Iceland, which drivers licence do I need to rent a car in Iceland, Iceland Travel Tips, Dear Heima, Outdoor Website for Women
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