Renting a Car in Iceland

7 Tips to Renting a Car in Iceland

To experience the best that Iceland has to offer, you need a car. Plain and simple. While it is possible to see the most popular day trips while staying in Reykjavik, you’ll have to book sightseeing tours. These tours won’t allow you the flexibility (or privacy) to truly enjoy the breathtaking sights of Iceland in all its true glory, especially if you plan on visiting the countryside. Thus, it is recommended to rent a car while exploring Iceland. 

Luckily, there are plenty of rental car companies to choose from while you’re planning your trip to the Land of Fire and Ice. In this post, we’ll go through some tips and things to think about when you rent a car in Iceland. 

1. Book in advance

Like I mentioned before, there are many rental car companies to choose from in Iceland. However, that does not mean you should wait until the very last minute to book. Not only do you risk a higher price, but you also risk not having a car to rent! Iceland has been a popular destination recently and rental cars go fast during peak season, which is mid-June through August. I would recommend that as soon as you buy your plane tickets, research (see Tip #2) and book your rental car. That way, you have one less thing to worry about before your trip. Even better, if your plans change, most rental car reservations can be cancelled without any charge. 

2. Renting the right car for you

In order to find the right rental car for you, a little research must be done. Rental car websites, such as Kayak and Auto Europe, are great as you can filter cars based on size, transmission type, price, dates, etc. Choose a car that will fit your budget and luggage best! Be sure to take note if the car is manual versus automatic or if the company limits the number of miles that can be driven.

We rented a Subaru Outback that was provided by Lagoon Car Rental and it was the perfect size for 3 adults and a toddler exploring Iceland. We were able to fit a carseat, luggage, and our hiking baby carrier with no problem and still had room to be comfortable while driving through the country. Lagoon Car Rental provides unlimited miles with all of their vehicles and while my husband and I can drive manual, we chose to stick (no pun intended ????)with automatic for our first time in Iceland. 

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3. Get the upgraded car insurance

If you’re like me, you HATE to pay for car insurance when renting a car. I mean, you’re only driving this car around for a week – what could happen? In Iceland, A LOT can happen. 

While the main roads around Iceland are paved, you will most likely drive on gravel at some point. These gravel roads will have tiny little rocks that can damage the body of your rental car. Worse, if you are following someone on a gravel road, these little rocks can be flung onto your windshield, causing a dreaded crack. Damage caused by gravel is the most common type in Iceland. Many rental car companies offer gravel protection for a low daily cost, so don’t hesitate to get it. Regardless if you get the gravel protection or not, I recommend driving slowly over paved roads and leaving plenty of room for the car in front of you. 

You may also need to consider sand and ash protection for your rental car. In Iceland, you can come to expect all kinds of weather, including sand, dust, ash, and rock being blown around during high winds. Sand and ash protection will cover any damages caused to the exterior of the car due to these earthy materials. 

There are a slew of other optional add-ons, including tire and theft protection. Consider your budget when making these choices. With the rental car company that I used, Lagoon Car Rental (link), they have different levels of car insurance packages that you could choose from. Since this was our first time in Iceland, we opted for the Gold package. 

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Insurance Options at Lagoon Car Rental

4. Drive like you would in the U.S.

There are some European countries that require an International Driving Permit in addition to your U.S.-issued driver’s license in order to drive in that country. Luckily, Iceland recognizes your U.S.-issued driver’s license and does not require any additional documentation. Icelanders also drive on the right hand side of the road, so you’ll feel right at home in your rental car!

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5. Hold onto that door!

This seems like an odd tip, but it kind of goes along with the previous tip about car insurance and the weather. As mentioned before, you can expect severe weather changes in Iceland, including very high winds. If you are traveling in such conditions, be very careful when opening your car door and hold onto it tightly! There are many horror stories of doors flying off due to the wind. Most insurance companies DO NOT cover damage to doors due to the wind. So, hold onto that door!

6. Don’t stop in the middle of the road

Yes, it can be tempting to stop along the side of the narrow road while you’re driving through the countryside. I mean, there are so many amazing sights in between your destinations that you MUST take pictures of or there are Icelandic horses or sheep to visit.  There are no other cars in sight, so it should be safe, right? WRONG! Do not stop in the middle of the road to snap a quick photo. Most of the major roads in Iceland are one-lane and an oncoming car may be traveling at 70-80 mph. By the time you see them, scramble back into your car, and try to accelerate, it may be too late! 

Instead, look for road signals for an upcoming designated parking lot where you can stop safely, stretch your legs, and take as many photos as you want. 

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Majestic Icelandic horses that you can see on the side of the road. Just don’t stop in the middle of the road to take a photo of them!

7. Don’t play chicken with fuel

This is probably the most important tip for renting a car in Iceland and you plan on driving out to the countryside. While you’re driving the Ring Road around the country, there are stretches where you will not see any form of civilization for many, many miles. Not even a gas station. Thus, it is important to plan ahead and fuel often, even if you have more than half a tank. Just top off anyways. You’ll thank me later. 

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There you have it! Seven tips for renting and driving a car in Iceland. Remember to follow all road signals and signs when driving. But most of all, have a great time in Iceland! Do you plan on renting or did you rent a car when going to Iceland?

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