Car Rental

Read This Before Renting A Car In Iceland (For Tourists)

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Last Updated on June 27, 2022 by Rose Morah

If you are visiting Iceland, you are probably thinking of renting a car. To help you breeze through the process of renting a car in Iceland, here is what we are going to discuss:

  • Tips for renting a car in Iceland
  • The best and cheap car rentals in Iceland.

Tips for renting a car in Iceland

1. Rent a car in Iceland using your credit card’s insurance

Most credit card providers offer good rental car coverage.

I recommend using credit card insurance because it will cost you nothing and your credit card provider is definitely going to be on your side.

On the other hand, insurance from the rental company will cost you extra and they will be looking out for themselves.

If you decide to use your credit card insurance, I recommend doing the following:

  1. Contact your credit card provider to find out what’s included in their coverage before you decline the car rental’s insurance. 

This is because what is covered under the credit card’s insurance varies. I would recommend doing this in advance before traveling to Iceland.

This is important because if the credit card’s insurance is adequate, you will be confident to decline the insurance given by the rental company.

  1. Let them know in advance to advise you on what you need to do so that their insurance can kick in.

This is because credit card providers have requirements. For example, they may require you to decline all the insurance provided by the rental company for them to cover you.

You may also like:

Read This Before Renting A Car In Costa Rica (For Tourists).

Read This Before Renting A Car In Ireland (For Tourists).

2. Know what you are paying for

Most people have learned this the hard way when booking rental cars online. This is because they tend to settle for cheap rental car offers that claim to have insurance included.

Later on, they realize that the insurance only covered minor damages, and not some damages like cracks in the windscreen, which tend to happen quite often.

This may end up costing you more than you may think.

Read and understand the fine print beforehand to know what you are paying for.

3. 3rd-party insurance providers may be cheaper than the rental company’s insurance

Sometimes 3rd part insurance providers are cheaper than the insurance offered by the rental car company in Iceland. A good example is Direct Car Excess Insurance. 

However, in case there are any damages on the rental car when returning it back, you will have to pay for the damages, then claim the amount you paid from the 3rd party insurance company.

4. Find out more about the rental company’s roadside assistance

While in Iceland, anything can happen when driving a rented car which may hence prompt you to request roadside assistance.

Most travelers forget to enquire whether or not they will be charged for roadside assistance.

Knowing the actual cost of the rental company’s roadside assistance will help you prepare and budget for that extra expense.

See also: Read This Before Renting A Car In Mexico.

5. Book early when the prices are cheaper/affordable

When planning your trip to Iceland, I highly recommend that you start looking at the car rental prices early for a better idea of the rates.

This will help you know when the prices are increasing and when it is a lot cheaper. 

However, you should expect to pay double the prices when traveling to Iceland during the high-peak season and when booking last minute.

You will be surprised to see prices shooting from $1600 to $3500 for 9 days in just one week.

See the cheapest Ways to Rent a Car.

6. Use websites that compare car rental prices of different companies in Iceland

A good example is

Northbound is amongst the best marketplace for rental cars if you are looking to compare rental car prices in Iceland.

You can use the website to find the cheapest or most affordable options, then book directly with the car rental company. 

It will also give you a better idea of how much you are going to spend renting a car in Iceland.

7. Start saving up early

I highly recommend you start saving up early because renting a car can be expensive, especially if you will be spending many days in Iceland. 

For example, during a vacation in Iceland, there was a time when renting a car became more expensive than my flight ticket for my round trip!

Best car rentals in Iceland 

NOTE: These recommendations are based on my experiences and other travelers who have been to Iceland.

1. Lotus car rental

If you’re looking for a cheap car rental in Iceland, then I would consider Lotus car rental the best choice.

This is what I loved about Lotus car rental:

  • They are cheap, easy to deal with and book with them. They were super friendly, and we were picked up and dropped off at the airport.
  • Even with the extra insurance that they provide, the total price was better than the prices that were listed online without insurance.
  • You can rent a specific model. 

Personally, this was great because I was able to choose my preferred vehicle model that had more space and ground clearance.

  • They have Wi-Fi hotspots that have good signals.
  • Their rental cars have studded wheels which is great if you will be visiting there during the winter to help with your winter driving.

2. Blue Car Rental

Blue Car Rental can be a bit expensive, but I would recommend them mainly because of the following main reasons:

  • They have good insurance policies, and you get to choose the level of insurance that you feel comfortable taking.
  • It is located just a short walking distance from the Keflavik airport. However, if you do not feel like walking, they have shuttles.
  • As far as I know, they do not have requirements for the driving experience.
  • They have good service and it is easy to book online.

They also have a reliable support number that will help you in case you are having any issues with the car on the road.

Renting a motorhome or campervan in Iceland

If you plan to rent a motorhome or a campervan, I recommend checking out Kuku Campers and Geysir motorhome rentals.

They are one of the best rental agencies that offer the services for travelers looking to rent a motorhome or campervan in Iceland.

All the best!

Hello there! My name is Rose. I’m passionate about electric cars and clean energy. My adventurous spirit and journalistic pursuits make each day fascinating and far greater. I consider traveling not just about the grandeur moments, but the little elements that transform the whole experience.