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Road Tripping the Land of Ice & Fire: Everything You Need to Know About Hiring a Car in Iceland

  • Post last modified:March 31, 2024
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Iceland is an incredible country, and there is so much to see! But hiring a car in Iceland isn't that budget-friendly. So is it worth hiring a car in Iceland? Or are there better ways to explore?


I have been to Iceland twice, and have learned a lot about the best things to do, and the best ways to see them. That's why I'm here to help answer all the questions you may have, and see if hiring a car in Iceland is the right choice for you.

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Is a Self-Drive Tour in Iceland Worth it?

First things's first- what is the best way to get around Iceland?


Well, while there are a ton of cities in Iceland that don't require a car, Iceland is a little bit different.


The country of Iceland has so many stunning landscapes, and a lot of them can actually only be reached by car! Hiring a car in Iceland is certainly worth it if you want to explore different areas of the country, but may not be so necessary if you are visiting for just a weekend, or a very short amount of time.


is hiring a car in Iceland worth it?
is hiring a car in Iceland worth it?
is hiring a car in Iceland worth it?
is hiring a car in Iceland worth it?

There are a lot of cool spots in Iceland only reachable by hiring a car.


Should I Drive or Rent a Car in Iceland?

We always prefer renting a car, and think hiring a car in Iceland is the way to go! If you are going to be visiting for more than 3 or 4 days, then it will let you see a lot more than relying on tours alone, and may even be cheaper.


Id you are only staying in Reykjavik, and have just a layover or a couple of days, then it may be wiser to skip hiring a car in Iceland, and doing a Golden Circle tour, experiencing the Blue Lagoon, and exploring the city of Reykjavik itself.


Here are some fun tours you can take from Reykjavik:

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Do I Need a 4x4 in Iceland?

There are certain areas of Iceland where you will certainly need a 4x4, while there are others that it's not very necessary. Depending on the itinerary you'd like to take, will depend on whether or not you should hire a 4x4 or not.


The Golden Circle

If you don't have a ton of days in Iceland, but want to explore some cool nature, then the Golden Circle is the number one tourist route to take. This road is easily accessible, and doesn't need a 4x4.

Golden circle, hiring a car in Iceland

The Golden Circle is very easy to visit, and does not require any specific vehicle.

The Ring Road

The Ring Road in Iceland is one of the most popular routes in the country, and is definitely the one that we recommend the most! This route is the one that circles the country of Iceland, and takes quite a few days to complete. 


We really recommend a week if you want to do the Ring Road, as there is a lot to see and do along the way. The road is well-paved, and super easy to drive, so if you are sticking to this route, you won't really need a 4x4.


Ring Road, hiring a car in Iceland
Ring Road, hiring a car in Iceland
Ring Road, hiring a car in Iceland


The Highlands

While the ring road goes along the coast, another popular area of Iceland to explore are the Highlands. The Highlands are the areas that are in the middle of the country, and in order to get to them you need to take "F-roads", which are typically not well-paved, and really require a 4x4 or high-clearance vehicle.


Keeping the Time of Year in Mind

If you are visiting in the summer, you won't need to worry much about the roads. However, from the fall to the spring Iceland can get a lot of snow! So if you are planning on hiring a car in Iceland in the winter, then getting a 4x4 will also definitely be necessary.

icy roads, hiring a car in Iceland

Even in June we saw a lot of snow and ice.


Hiring a Car in Iceland

If you do decide that hiring a car in Iceland is something you'd like to do, then let's dive into the booking process.


Hiring a Car in Iceland: How & When to Book

When it comes to hiring a car in Iceland, it's important to book as soon as possible! This is because hiring a car in Iceland is extremely popular, and the country has been seeing more and more tourism each year.


The longer you wait to book, the more the prices increase, and the less options there are for different car options.


We booked our car rental with economy bookings, and had a seamless process with them. The one thing we would suggest though, is to purchase insurance separately (we'll get into that further into the article).


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Things to Know About Hiring a Car in Iceland

Now that you have decided on hiring a car in Iceland, let's go over having the best road trip possible.


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Hiring a Car in Iceland: Places to Visit

One of the things we loved about hiring a car in Iceland is experiencing all of the different landscapes! There are 10,000 waterfalls in the country, and so many of them are located right off the side of the road. In fact, we used the opportunity to constantly fill up our water bottle.


Have your camera ready, because not even 5 minutes will ever pass by without seeing some kind of incredible scenery.


Here are some of the places work adding to your Iceland road trip bucket list:


The Golden Circle

This is the most famous (and touristic) area of Iceland. With a number of stops, you can easily pull over right off the main highway to experience a number of things such as:

  • Kerid Crater: large volcano crater with a lake in the middle and red rocks and grass around it

  • Gulfoss: the most famous waterfall in the area

  • Thingvellir National Park: stunning natural park where Game of Thrones was filmed

  • Geyser Geothermal Area: a massive geyser that erupts every several minutes

  • Fridheimar Tomato Farm: family-run farm that's a great place for lunch

Gulfoss, golden circle in Iceland

The West Fjords

This is one of the most underrated areas of Iceland, and is known for its dramatic cliffs and puffins. Some of the highlights include:

  • Budir: extensive lava fields

  • Hellnar: cliffs with giant rock arches

  • Snaefellsjokul: national park with a big glacier in the middle of it

  • Kirkjufell: an iconic cone-shaped volcano with waterfalls right next to it.

  • Latrabjarg: giant cliffs with puffins

  • Dynjandi: beautiful set of waterfalls

Drynjandi, west fjords
puffins in Iceland
roads of Iceland


Akureyi

This is the second biggest city in Iceland, and is the main hub for exploring the north of the country. Some of the highlights are their incredible thermal baths, breweries, and even a mix of both- a beer spa!

Akureyri Iceland


East Iceland

East Iceland has some of the most impressive landmarks in the country, as well as one of our favorite towns. Here are a few things you should check out while in the area:

  • Studagil Canyon: turquoise river with large basalt columns surrounding it

  • Hengifoss: a tall waterfall surrounded by striking red rock

  • Seydisfjordur: an adorable town on the coast with a rainbow road, cute blue church, and nice bars

  • Vok Baths: unique set of thermal baths on a lake

  • Eystrahorn: one of the most beautiful mountain peaks on the island

baths in Iceland
Estrahorn, east of Iceland
canyon in the east of Iceland
rainbow road in the east of Iceland


Vik/Southern Iceland

The south of Iceland has become one of the most visited areas by tourists, and with good reason! Full of striking rock formations, black sand beaches, lupine fields, and the best glaciers, it's also one of our favorite areas in Iceland. Here are a few of the things you shouldn't miss out on:

  • Skogafoss: one of the most beautiful and grandest waterfalls in the country

  • Seljalandsfoss: a unique waterfall that you can walk behind

  • Vik: a quaint town facing black sand beaches

  • Reynisfjara: a black sand beach with basalt columns and other incredible rock formations

  • Jokulsarlon: the most famous glacier that can easily be visited

  • Diamond Beach: a black sand beach with massive chunks of ice from Jokulsarlon glacier

  • Sólheimasandur: an abandoned plane wreck

Skogafoss, hiring a car in Iceland
Vik, hiring a car in Iceland
abandoned airplane, hiring a car in Iceland


The Westman Islands

This is one of the least-visited areas of Iceland, but was another one of the most underrated! In order to get here you'll have to take the car ferry from Landeyjahöfn. It's known for its colorful volcanic craters, an elephant-shaped rock, and surrounding green islands once used for fisherman.


Westman Islands in Iceland
museum in the westman Islands, Iceland
westmand islands in Iceland


The Highlands

The highlands is the area with some of the most otherworldly formations in Iceland. The roads there can only be accessed in the summer, and a 4x4 is absolutely necessary. The area is completely remote, but some of the things you can experience are rainbow mountains, colorful volcanic craters, and giant geothermal fields.

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Hiring a Car in Iceland: Rules & Regulations

Now that you know where to visit around the countries, it's important to know some of the rules and regulations for hiring a car in Iceland!


Speed Limits in Iceland

One of the most important things to keep in mind in Iceland is watching your speed! This is because Iceland has speed cameras and radar everywhere, meaning if you go over the limit, you automatically get caught. You're rental company will get billed later, and the tickets are definitely not cheap.


Speed limits on the main highways are 90 km/hour, and are 80 km on gravel roads and rural areas. Populated areas such as major tourist destinations and cities have speed limits between 30 and 50 km/hour, so make sure to watch out for the signs.


F-Roads in Iceland

F-roads are roads that are those that are susceptible to severe weather, therefore are only open during the summer months. There is not an exact date, but the government announces when the roads are clear to go on, which is typically sometime in June, and lasting til September or October (whenever snowfall starts).


Some locations such as the Highlands, or certain remote waterfalls, can only be reached by F-roads, Below you can see the map of which roads are considered F-roads:


Can You Turn Right on Red in Iceland?

There are actually very few traffic lights at all in the country. However, in the capital it is important to be aware of the traffic rules, and you cannot turn right on red in Iceland.


Hiring a Car in Iceland: Parking

Parking in Iceland is extremely easily! All destinations have parking lots, and lots are aways free. The only place you have to pay for parking is in the center of Reykjavik, from 9 am to 6 pm. You can pay directly at the machines, with either cash or credit card.

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How Expensive is Hiring a Car in Iceland?

We've already mentioned that it can be quite expensive to hire a car in Iceland, but let's break is down for you:


Cars

Car rentals themselves depend on a few factors. The smaller the car, the cheaper. If you need a 4x4 it will certainly be more expensive, but it may be necessary depending on where you are going. Manual cars are also cheaper than automatic, so if you have an automatic 4x4, you can expect to pay probably double what you would pay for a small manual car.


Another thing to keep in mind is the amount of days, as well as how far in advance you book, Generally speaking, the earlier you book, the cheaper, and the more days you rent, the cheaper each daily rate is. Cars are also more expensive in the summer, as this is when they are in highest demand.


The average price of a car per day is around $100. You can get a car as cheap as $30/day, and rates can go up to $200/day.

Gas

Gas in Iceland is not cheap! Prices range from 310-337 ISK/liter, which is the equivalent of $8-9/gallon.


Tickets

Parking tickets start at 3,400 ISK. and go up to 6,750 ISK if they aren't paid within 14 days. If tickets aren't paid within 28 days then the fine goes up to 9,000 ISK.


Speeding tickets start at $195 USD, and can go up to almost $700! The fines are as follows:

  • Driving more than 26 km/hour over the allowed top speed in 30-35 km speed zones: $195 USD

  • Driving more than 36 km/hour over the allowed top speed in 50-60 km speed zones: $300-390 USD

  • Driving more than 41 km/hour over the allowed top speed in 70 km speed zones: $460 USD

  • Driving more than 41 km/hour over the allowed top speed in 80-90 km speed zones: $615-690 USD

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Hiring a Car in Iceland: Safety

One thing you'll want to keep in mind while hiring a car in Iceland is safety! A lot of people were particularly concerned when they found out that we were sleeping in the car, and were wondering how dangerous it is.


Actually, car camping is quite common in Iceland! As the weather can be very temperamental, making camping right at times, sometimes it just is more comfortable to sleep in the car.


Iceland is one of the safest countries in the world, and even times we left the windows down and felt completely safe. It's an expensive country to visit, so even tourists are typically ones who are "well-off" and aren't looking to steal or do any other shady activity. We also found that the locals and police are always willing to help and are quick to jump to the scene if anything happens along the road.


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Other Things to Keep in Mind for Hiring a Car in Iceland

Now that you know all of the basics for hiring a car in Iceland, let's go over the final details you many want to keep in mind.


Weather Conditions in Iceland

The weather in Iceland is crazy! One minute it may be super sunny, and the next you may find yourself in an intense storm.


It's important to prepared for anything in Iceland, and never to drive when the weather gets bad. Rather try to wait it out, so you do't risk getting into an accident.


Another thing to keep in mind is that it is extremely common for cars to get damaged, by no fault of the driver at all! Strong winds can whip open the door, or cause sand to crack the windshield. This can make hiring a car in Iceland a bit more stressful, which is why getting insurance is crucial!

sunset in Iceland

The weather in Iceland is very temperamental and can change very rapidly.

Getting Car Insurance in Iceland

Hiring a car in Iceland is expensive, but really the most expensive part is purchasing insurance for the car.


While we don't always get insurance while we travel, it is definitely worth it when in Iceland! Damaging the car is ridiculously expensive, and even a tiny scratch can cost around $1,000. This means if anything happens to the car (which is quite common), it can really add up quickly.


We got our insurance through a third party, and after the incident with the scratch on our car, we learned that getting insurance through the rental company itself is much better, and here's why:

  • If you get insurance through a third party, you'll have to pay the full bill, and wait for the claim to go through before the insurance company will reimburse you.

  • The insurance company most likely won't use the same exchange rate as your bank, meaning when you get your refund, it might not come back as the same amount you paid out of your pocket (in our case we lost $100 in conversion fees).

  • Rental companies are easier to deal with, and much more flexible, if you pay for insurance directly through them.

How to Prepare for an Iceland Road Trip

When hiring a car in Iceland, you'll want to remember a few things to bring with you.

First, you'll want to bring anything with you for camping in the car (if this is your plan). Some things you'll want to bring are pillows, a sheet/blanket, a mat to lay on, and something to protect the windows from the sunlight.


You'll also want to make sure that you are equipped with the proper electronics. We suggest getting a car charger for regular plugs, as well as a power bank to have with you on your adventures.


Finally, snacks are key! We brought a bunch of protein bars, trail mix, and beef jerky with us. This not only helped us save money, but were snacks that were high in protein and fiber that could hold us over during our adventures. Iceland has a limited number of super markets, so it's important to be prepared for a road trip around the country.


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Tips for Hiring a Car in Iceland

  • Book as early as possible.

  • Make sure to get full-coverage on the car.

  • Get a 4x4 if you want to explore the highlands, or some places off-the-beaten-path.

  • Get a large SUV, so that you can also sleep in the car.

  • Always drive under the speed limit.

  • Bring a car charger to plug in your devices.

  • Get tons of snacks.

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