Car Hire In Iceland – Cheap Car Rental 2024

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Journey into the heart of the Land of Fire and Ice with a car hire in Iceland. This option offers you the liberty to encounter Iceland’s natural wonders at your own speed. This guide will aid you in navigating through the specifics of a budget-friendly and convenient car rental experience in Iceland for 2023.

Why Choose a Car Hire in Iceland?

Opting for a car hire in Iceland provides you with:

  1. Independence: Plan your own itinerary, pause at awe-inspiring sights, and immerse yourself in Icelandic culture.
  2. Convenience: Avoid waiting for public transport and reach off-the-beaten-path destinations that buses or tours may not cover.
  3. Comfort: Enjoy the comfort and privacy of your own vehicle, particularly when travelling with family or carrying luggage.
car hire in Iceland
car hire in Iceland

Selecting the Right Car Hire in Iceland

Finding the right car hire in Iceland entails consideration of the following factors:

  1. Vehicle Type: The type of vehicle depends on your journey – compact cars are great for city exploration, while 4×4 vehicles are essential for navigating Iceland's rugged terrains.
  2. Rental Policies: Always review the rental company's policies regarding fuel, mileage limits, and late returns.
  3. Additional Services: GPS, child safety seats, and insurance options are some added services to consider when comparing rental prices.

Ideal Season for Car Hire in Iceland

Iceland’s peak tourist season, the summer months from June to August, offers long daylight hours ideal for sightseeing. However, those seeking a budget-friendly option might consider the off-peak winter season, keeping in mind the challenging driving conditions due to ice and snow.

Top Car Hire Companies in Iceland

Several reputable car hire companies operate in Iceland, including:

  1. Blue Car Rental: Known for its wide range of vehicles and excellent customer service.
  2. Lagoon Car Rental: Offers vehicles suited to Iceland’s unique terrain, including 4×4 options.
  3. Cheap Jeep Car Rental: Ideal for those looking for budget-friendly and rugged vehicle options.

Tips to Secure a Cheap Car Hire in Iceland

  1. Book Early: Securing your car hire in advance often results in better rates.
  2. Compare Prices: Use online comparison tools to ensure you get the best deal.
  3. Understand Insurance Options: In Iceland, considering additional insurance like gravel or sand and ash protection can be beneficial due to specific road conditions.

More About Car Hire In Iceland

Car hire in Iceland is the perfect choice for visitors looking to explore the island's famous wildlife and scenic landscapes. Given the limited public transportation outside larger towns and cities, a rental car provides much-needed travel flexibility. Most car hire agencies have a presence in the capital city of Reykjavik and at Reykjavik International Airport, allowing for convenient vehicle pick-ups immediately upon arrival.

The popular routes for road trips in Iceland include the Golden Circle and Snæfellsnes Peninsula, with each route typically requiring around 2 days. For an in-depth exploration, a 10-day journey around the ring road is recommended.

In Iceland, mountain roads, known as “F roads,” are only open seasonally, typically between the end of June and mid-July. While these roads offer access to stunning natural beauty, it's crucial to note that only four-wheel-drive vehicles or jeeps are legally permitted to travel on them.

Travelers using the main ring road may pass through the Vadlaheidargong Tunnel, located in the island's north. This 7.5 km (4.7 mi) tunnel is a convenient option to shorten your journey and avoid harsh winter driving conditions. A payment of 1,500 ISK (12 USD) is required online through the tunnel's website if paid within 3 hours of your trip, or 2,500 ISK (20 USD) if paid later.

When hiring a car in Iceland, it's essential to be aware of certain regulations. Headlights must be switched on at all times, even during daylight hours in the summer. Seatbelts are mandatory for all passengers, and cell phone use while driving is prohibited unless using a hands-free kit. Off-road driving is illegal and can result in substantial fines or even imprisonment.

In terms of budgeting, 25% of our users found rental cars in Iceland for $110 or less. To secure a below-average price, we recommend booking your car hire in Iceland at least 4 days before your trip. However, note that off-airport rental car locations in Iceland are typically 58% more expensive than airport locations. Intermediate rental cars in Iceland tend to be around 33% cheaper than other car types.

Frequently Asked Questions

What are the benefits of choosing a car hire in Iceland?

Opting for a car hire in Iceland provides you with independence to plan your own itinerary, the convenience to reach remote locations, and the comfort of traveling in your own vehicle, especially when with family or carrying luggage.

What factors should I consider when selecting a car hire in Iceland?

When selecting a car hire in Iceland, consider the type of vehicle you need based on your travel plans, the rental company's policies on fuel, mileage limits, and late returns, and any additional services the company offers, such as GPS or child safety seats.

What is the ideal season for car hire in Iceland?

The ideal season for car hire in Iceland is during the summer months from June to August, due to extended daylight hours suitable for sightseeing. However, for cheaper rates, consider the winter off-peak season, keeping in mind the challenging driving conditions.

Which are some top car hire companies in Iceland?

Some top car hire companies in Iceland include Blue Car Rental, known for its wide range of vehicles and excellent customer service, Lagoon Car Rental, which offers vehicles suited to Iceland’s unique terrain, and Cheap Jeep Car Rental, ideal for budget-friendly options.

How can I secure a cheap car hire in Iceland?

To secure a cheap car hire in Iceland, consider booking in advance to get better rates, using online comparison tools to find the best deal, and understanding the various insurance options, including additional coverage like gravel or sand and ash protection, which might be beneficial considering Iceland's specific road conditions.


Choosing a car hire in Iceland can enhance your travel experience, granting you the freedom to explore the breathtaking landscapes at your own pace. With the help of this guide, you're well-prepared for your Icelandic adventure in 2023. Safe and happy travels!

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