What Do You Need to Know to Rent a Car in Iceland?
Renting a car in Iceland is straightforward: pick up your car at Keflavik Airport or in Reykjavik and choose a standard car for the Ring Road or a 4x4 for the Highlands.
The choices are less simple than they seem: do you rent in the city or at the airport? And what’s the better fit, a compact car, SUV, or 4x4? In this guide, we help you make the right decision with practical tips, prices, and real-world experience.
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Reykjavik or Keflavik Airport: Where Is it Best to Rent?
Most travelers pick up their car at Keflavik Airport right after landing. You’re immediately on the Ring Road and don’t need to arrange a transfer. Downside: in peak season, popular models sell out quickly here.
In Reykjavik, you’ll often find slightly lower prices, especially outside the summer months. Comparing options pays off. If you plan to explore the city for the first few days, renting in Reykjavik can be both cheaper and more convenient.
If you don’t book in time during summer, you risk only the more expensive 4x4s still being available.
Which Car Fits Your Trip?
- Ring Road and Golden Circle. A standard passenger car is sufficient. We ourselves drove a small car around the island in 2018, ideal as long as you stick to the main roads.
- Highlands and F-roads. A 4x4 is mandatory here; otherwise, you’re not insured.
- With family or friends. An MPV or van offers more space and comfort.
- Prefer extra stability. Choose an SUV for the gravel sections of the Ring Road.
Also read our page on when you need a 4x4 and when a regular passenger car is enough.
What Are the Roads and Weather like?
The Ring Road is mostly paved, but there are gravel sections and many one-lane bridges. The weather can change rapidly: sun, rain, and fog within an hour. Always check current conditions at road.is or safetravel.is.
In winter, some parts of Iceland are closed. Plan your trip carefully and allow for more flexible travel times.
How Much Does a Rental Car Cost in Iceland?
For a 10-day rental period, these are average prices (all-risk insurance):
- Small car: €56 per day
- SUV: €70–€80 per day
- 4x4: from €103 per day
- MPV/van: from €190 per day
In winter, prices are often significantly lower. Note: drivers under 25 may face restrictions and additional costs. You can read more about this on our page about age requirements for car rental in Iceland.
Want to know which insurances you actually need? See our article on car insurance in Iceland .
When Should You Book?
The number of rental cars in Iceland is limited. Especially in July and August, small cars and budget models often sell out quickly. Book well in advance, whether you’re renting in the city or at the airport. This helps you avoid paying more than necessary or ending up with a car that doesn’t suit your trip.
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Frequently Asked Questions about Car Rental Tips in Iceland
Is it better to rent in Reykjavik or at Keflavik Airport?
At Keflavik Airport, you can pick up your car immediately after landing—convenient if you want to hit the Ring Road right away. In Reykjavik, prices are sometimes lower, especially if you plan to explore the city first.
Do You Always Need a 4x4 in Iceland?
No. For the Ring Road and the Golden Circle, a regular car is sufficient. A 4x4 is only mandatory, and insured, on the F-roads.
When Is the Cheapest Time to Rent?
In winter, prices are often about half of summer rates. Keep in mind that snow or ice can make some routes inaccessible.
How Many Days Do You Need for the Ring Road?
For the 1,335 km (830 miles) of the Ring Road, it’s best to plan for 10 days. With less time, the Golden Circle (300 km / 186 miles) is a good alternative.
