Car rental in Iceland

Car rental in Iceland isn't just convenient—it's essential. Public transport only connects major cities, while the country's main wonders—Skógafoss waterfalls, Reynisfjara black beaches, glacial lagoons, and geothermal valleys—are scattered across the island. Group tours are expensive and limit freedom, while taxi rides for long distances are simply prohibitive.

Behind the wheel, you create your own itinerary: witness sunrise at Strokkur geyser in the morning, explore Fjaðrárgljúfur canyon during the day, and reach the seal colony on Vatnsnes peninsula by evening.

Why Book Your Car Online with Localrent

Online advance booking allows you to compare the entire available fleet by price and conditions, rather than just vehicles remaining at offices upon arrival. Why travelers choose Localrent:

1. Comprehensive insurance included: Nearly all vehicles feature extended insurance coverage in base pricing.
2. Modern fleet: Most rental cars in Iceland are under 5 years old.
3. Diverse vehicle selection: From affordable mid-range models like Toyota Aygo and Dacia Duster for Ring Road touring, to powerful 4WD vehicles like Toyota RAV4 or Toyota Land Cruiser for highland adventures.
4. Flexible payment terms: Only 15-20% advance payment required, with remainder due upon key collection. Vehicles available without credit card requirements or deposits.
5. Transparent pricing: Final booking amount includes all fees and local taxes.

Dedicated support: Localrent's customer service assists with any rental questions before and during your Iceland journey.

Car Rental Requirements in Iceland

Essential documentation:

• Passport
• Valid driver's license
• Booking voucher

Driver qualifications: Most Iceland car rentals require minimum 3 years driving experience. Wide vehicle selection available for drivers 23+ with 3+ years experience, while full fleet access requires age 26+ with 3+ years experience.

Requirements may vary even for identical models from different rental companies, so always verify specifications in vehicle listings. Use filters to set your age and experience level to display only suitable vehicles.

For how long to rent a car in Iceland

You'd better think through your trip to this island in advance. Depending on your goals, the time of year, and local weather, it will be clear for how long you need to rent a car.

If you are planning a short outing to the top attractions, then 2-3 days of rent will be enough.

And if you're going to have a long, leisurely trip around the island, then you'll need a car for a week or two.

Traffic Rules and Driving Insights in Iceland

Speed limits and road regulations:

• Urban areas: 50 km/h (30 km/h in residential zones and near schools)
• Main asphalt highways (Route 1): 90 km/h
• F-roads: 80 km/h
• Headlights required at all times

Traffic navigation considerations:

• Roundabout protocols: Icelandic cities frequently feature two-lane roundabouts where inner lane traffic always has priority over outer lane vehicles. Signal only when directly exiting the roundabout to avoid misleading other drivers.
• Off-road restrictions: Off-road driving is prohibited both by rental companies and Icelandic law to preserve unique landscapes. Violations result in substantial fines and potential imprisonment.

Infrastructure specifics:

• Single-lane bridges: Common outside cities. First vehicle to enter has right-of-way. If you're closer to the bridge when seeing oncoming traffic, proceed first; otherwise, yield.
• Tunnel navigation: Long tunnels feature passing pockets on the right for oncoming traffic encounters. Remove sunglasses before tunnel entry for better vision adaptation.
• Wildlife awareness: Hundreds of thousands of sheep graze freely near roads. Reduce speed when spotting animals near highways and prepare for sudden stops.

Safety preparation protocols:

• Essential daily checks before each departure, especially for long distances or shoulder seasons:
• Monitor current road conditions at road.is
• Check weather forecasts at vedur.is (conditions change rapidly)
• Download ICE-SAR app (Iceland Association for Search and Rescue) for emergency coordinate transmission in remote areas
• Maintain 1.5-meter minimum distance when overtaking cyclists (particularly numerous in summer)

Parking Guidelines in Iceland

Urban parking systems: City parking typically requires payment—look for blue "P" signs. Pay through parking meters, Parka.is app, or parka.is website by entering vehicle number and zone. Popular destinations like Þingvellir or Seljalandsfoss also feature paid parking—check entrance signage.

Natural attraction parking: Route 1 attractions often provide free parking. Look for designated gravel areas with white markings. Avoid prohibited zones near glacial lakes or geothermal fields.

Camping vehicle regulations: Strict rules apply to campers and RVs. Overnight stays permitted only at official campsites. Parking outside campsites is prohibited—police patrol popular locations.

Free parking zones:

• Urban residential areas (white markings, 2-4 hour limits)
• Most Route 1 waterfalls and viewpoints
• Small towns except central streets

Always verify signage before stopping. Private property marked "Einkaaður" prohibits parking.

Fuel Stations in Iceland

Service station features: Icelandic gas stations function as comprehensive service centers with cafes, shops, restrooms, and sometimes showers. Major chains like N1, OB, and Orkan operate 24/7 along Route 1, but remote areas like Westfjords have stations spaced 100+ km apart.

Fueling process:

• Select pump (green handle: gasoline, black handle: diesel)
• Choose payment method: specify amount on terminal or select "Full Tank," or proceed to station cashier
• Apply card to terminal or pay cash at register
• Refuel vehicle

Remote area considerations: Fuel planning proves crucial for remote Iceland travel. Maintain minimum half-tank levels before venturing inland where stations may be absent for 100+ km. Mountain areas require emergency fuel canisters for safety.

Station dining options:

• N1: Famous Pylsur hot dogs and warming Kjötsúpa lamb soup
• ÓB: Fresh salmon sandwiches and Skyr Icelandic yogurt
• Orkan: Pastries with Reykjavík-roasted coffee
  

Roads in Iceland

All major highways are well paved, unlike most of the secondary roads.

The main traffic artery of the island is Route 1 or the Ring Road. You can drive any car on it. It is mostly two lanes wide and very convenient for tourists. Many popular tourist attractions are easily accessible from the Ring Road. It connects the majority of towns and many villages of the country, so you will have no problems with navigation, gas stations, food or accomodation.

The major highways can be traveled at any time of year, but be sure to check weather forecast in the winter, because some road sections may be closed due to snowstorms.

The unpaved highland roads in Iceland are known as F-roads.

Those are challenging roads that often have potholes, large rocks, rivers without bridges, and other obstacles. If you suddenly get caught in heavy rain, the road can get washed out in no time and the car might not be able drive out on its own. Be sure to check the weather conditions and assess your capabilities before the trip. If in doubt, limit your trip to the major highways.

It is illegal to drive off-road in Iceland.

Car Booking Process in Iceland

Online booking advantages: Online reservation provides the most convenient method for finding suitable vehicles. Compare verified rental company offers in advance, selecting vehicles matching your route and budget.

Booking steps:

1. Set dates and locations: Specify rental dates and pickup/return cities. Use "Specify location" for convenient pickup points.
2. Apply filters: Sort by vehicle type, transmission, deposit amount, and other criteria.
3. Review vehicle details: Study listings and add necessary options like child seats, roof racks, or in-car Wi-Fi modems.
4. Complete booking: Enter primary driver information and contacts. Pay advance by card; voucher arrives via email.
5. Vehicle collection: Inspect exterior and interior upon pickup, documenting all defects. Check fuel level for matching return. Sign contract and pay remaining balance.

Travel preparations complete—time to explore!

Essential Iceland Destinations by Car

Iceland is designed for road adventures, where every turn reveals new, often incredible vistas. Glaciers, waterfalls, volcanic fields, and northern sea beaches await. Essential requirements: reliable maps and weather adaptability.

Must-see destinations:

1. Hverir Geothermal Area near Lake Mývatn: This valley resembles alien landscapes with bubbling mud pots of various sizes, strong sulfur scents, and salt/mineral deposits creating bright yellow, orange, and red earth tones while fumaroles release steam clouds. Walk safely on wooden boardwalks for optimal viewing. En route, stop at Skútustaðir pseudocraters on Lake Mývatn's southern shore—formed when lava contacted water.
2. Skógafoss Waterfall: One of Iceland's most impressive and accessible waterfalls, featuring a 25-meter water wall. Approach quite close to the base where spray creates constant mist and frequent rainbows. Climbing steps on the right reveals summit views and the Fimmvörðuháls trail beginning. Nearby Skógar Museum, housed in an old school building, displays fascinating exhibits about rural life and folk crafts.
3. Jökulsárlón Glacial Lake: Where Breiðamerkurjökull glacier slides into the ocean, breaking into icebergs. Ice chunks of all shapes and blue shades float in the lake, slowly moving seaward. Observe seals often resting on ice floes from the shore. Directly across the road lies Diamond Beach (Breiðamerkursandur), where waves cast small ice fragments onto black volcanic sand.
4. Vík Town and Reynisfjara Beach: Vík is Iceland's southernmost settlement. The main nearby attraction is Reynisfjara black basalt beach, where powerful Atlantic waves crash against shores while protruding basalt columns form unusual hexagonal structures. Spot Reynisdrangar sea stacks offshore.
5. Þingvellir National Park: Iceland's historical and geological heart. Here in 930 AD, the first parliament—Althing—was established. The park sits in a rift valley where Eurasian and North American tectonic plates separate. Visible ground fractures and fissures include the famous Almannagjá gorge. Þingvallavatn is the country's largest natural lake. Walk trails along the rift, viewing Öxarárfoss waterfall cascading from Öxarárgjúfur canyon within park boundaries.

Extended exploration opportunities: If dramatic landscape excitement continues, head east to Stuðlagil canyon with its basalt columns and turquoise river. In Skógar valley, visit Skógar Museum for Icelandic lifestyle insights. For seal viewing in natural habitat, detour to Vatnsnes peninsula in the north, especially near Hvítserkur rock.

Car Rental Locations in Iceland

Pickup options: When booking online, specify convenient pickup locations. Most tourists collect vehicles directly at Keflavík Airport (KEF) for immediate departure. For city-based starts, vehicles are available in Hveragerði, Kópavogur, Reykjavík, Selfoss, or Hafnarfjörður.

Collection options include airport pickup, rental office collection, or address delivery. Use the "Specify location" filter to display only vehicles available at your chosen pickup point, saving time.

Essential Iceland Driving Tips

Car rental provides the best method for experiencing Iceland's beautiful locations, but road conditions have unique characteristics. Key knowledge for comfortable and safe road trips:

1. F-Road Regulations Due to Iceland's challenging weather conditions, F-category dirt road travel requires 4WD vehicles and mandatory rental company coordination. Contact Localrent support before booking, specifying route and travel dates for permission.
2. Daily Safety Rituals Begin each day checking weather and road conditions. Icelandic weather changes instantly. Strong winds particularly threaten high vehicles with roof tents or campers, while winter blizzards pose severe risks. Red alert declarations prohibit all vehicle travel—life-threatening conditions exist.
3. Iceland's Sheep Country Spring and summer feature newborn lambs and sheep grazing freely nationwide. They frequently enter roads or stand nearby. Always reduce speed when spotting sheep near roads—they're unpredictable and may dart into traffic. Exercise special caution in rural areas.
4. Icelandic Horse Encounters If stopping near roadside horses, never feed them. Icelandic horses require specific diets; foreign food seriously harms their health. Horses are skittish animals. When encountering riders or herds crossing roads, stop at safe distances allowing calm passage without honking or startling animals.
5. Wind Management Iceland experiences almost constant strong winds. When parking, position vehicles so wind hits windshields rather than doors. Opening doors against wind risks gusts wrenching them from hands and damaging hinges—a common tourist vehicle problem.
   

Frequently Asked Questions About Iceland Car Rental