Things to Consider When Renting a Car in Iceland

Out of the few times I have visited Iceland, I have only rented a car once and it COMPLETELY changed how we were able to see the country. Iceland is a wild and rural island and aside from within Reykjavík and to and from the airport, there is extremely limited public transportation. If you want to see all the beauty Iceland has to offer, you are going to need a rental car to do it! Now, let’s get into the nitty gritty of things you should consider when renting a car in Iceland.

1. How to Rent a Car in Iceland

Since we were from America and had an English driver’s license, the process for renting a car in Iceland was SO MUCH easier than I thought. Initially, I was terrified at renting a car abroad (I just did it for the first time this recent trip to Iceland!) but it was so much smoother than anticipated. From my understanding, you just need to have a valid driver’s license that is in English and be eligible to rent a car (age) and you can book your rental! We booked through Avis and aside from some wait time at the airport, the experience was rather seamless. There are various agencies you can book from, but Avis worked the best for our budget and car options. You can make your booking ahead of time or (risk some higher costs) and book it once you get to the airport!

2. Parking

Phew, parking was my biggest headache while staying in Reykjavík at first. Until we knew where parking garages were throughout downtown, it wasn’t uncommon to see us looping through countless one-way streets trying to find a parking spot with enough space to squeeze our car in. Even in the parking garages, having a compact rental vehicle SAVED us. The last thing you want is to scratch the side of your rental car (ouch). Parking was very hard to find at times in Reykjavík, but once you left the capital it was extremely easy to find parking for us at all major tourist attractions. You do have to pay for parking basically everywhere you go in Iceland, which was easy via the Parka app. In most places, we only paid for the exact amount of time we were there (verified via cameras posted around the island – there is NO way to avoid paying for parking lol) or had to pay for a set amount of time (like three hours or sometimes the full day). On average, I’d say we spent about $8 for parking each time we parked somewhere. 

3. Getting Gas

First and foremost, gas MUST be included in your budget – it is not cheap in Iceland. Luckily, we were splitting among four people, so it made it manageable, and while the costs were not atrocious, they certainly added up for our trip. We sometimes spent six hours a day driving, so this was not shocking for our group. We did get a gas-conscious vehicle which saved us a lot of money, but it was something we incorporated into our trip expenses. Gas stations are available in most areas of the south part of the island, and we tried to stagger when we got gas while on the road so that we didn’t end up stranded on the side of the road. Unlike most gas stations in America, some stations are open 24/7 with no one manning the building, and sometimes there was no building at all! Just a few pumps outside (which only accept cards btw). Most times, you can select the EN button which converts the language to English on the machine. All in all, getting gas isn’t really anything special for Iceland.

4. Speeding + Legal Considerations

Holy moly, Iceland does not mess around with their speed limits and monitoring. On several different major roads in Iceland, there were speed cameras which I’ve been told administer a crazy amount of speeding tickets to tourists. Sometimes it feels like you are going SO SLOW, especially on major highways where you only get up to 90 km/hr, but I’d recommend enjoying the ride and abiding by the posted limit and avoid risking a ticket. Another random experience we had while driving back from the Westman Islands was we were rerouted by authorities (including all cars coming from our direction) for a driver’s license check by the police. We had no idea what was going on when it happened, but the officer just asked for the driver’s license (not the rest of the passengers’) and let us go on our way. So weird! Served as a reminder to always have your license with you while driving and to only let insured/registered drivers behind the wheel. Finally, keep in mind that you will probably be charged a road tax once you return the rental car based on how far you drove and the weight of your vehicle. Otherwise, we had a very seamless driving experience!

5. Additional Considerations

When renting a car in Iceland, there are a few additional things to consider. First, make sure you rent a car that serves YOUR travel needs. For us, finding a car to fit four people, was fuel efficient, and could handle minimal off-roading was most important. We saw a wide variety of rental cars around Iceland, ranging from tiny compact two-seaters to MASSIVE monster truck looking vehicles and camper vans. If you are traveling outside of Reykjavík, I’d recommend renting a car with relatively high clearance, some of the side- and off-roads had larger potholes or bumps that would have been risky to navigate in a low-clearance car. Four-wheel drive is a must if you can! Moreover, beware of the sheep! While we did not see too many right next to the road, I have heard of full gaggles of sheep running through the road in more rural areas. Be an aware driver! The weather can also change in the blink of an eye from blazing sunshine at 10pm to pouring rain the next. In the winter, I can imagine that road conditions get even more dangerous and demanding, so that is definitely something to consider. All in all, get that rental car! Have fun and enjoy exploring the breathtaking country that is Iceland.