Iceland Car Rental: Hidden costs

Hidden Costs in Iceland Car Rental

Renting a car in Iceland is one of the best ways to explore the country's breathtaking landscapes and unique attractions. With the freedom to travel at your own pace, you can visit remote locations, stunning waterfalls, and charming towns that are not always accessible by public transport. However, while the experience is generally smooth and straightforward, there are potential hidden costs that can catch travelers off guard.

At Northbound, we believe in complete transparency and strive to ensure our customers are well-informed about all potential charges. Our goal is to make sure you are aware of these costs upfront so you can budget accordingly and avoid any surprises. By understanding these hidden fees, you can plan your trip better and enjoy your Iceland car rental experience to the fullest.

This guide outlines the various costs you might encounter before you arrive, during your trip, and after you leave. From additional insurance and equipment rentals to parking fees and traffic fines, we cover everything you need to know to make your rental experience as seamless as possible.

Read on to discover how you can avoid these hidden costs and enjoy a worry-free adventure in Iceland.

Check out this blog post about pickup, driving and returns in Iceland

Before You Arrive

Fuel Charges

• Fuel Policy: Some Iceland car rental companies require you to return the car with a full tank of fuel. If not, they may charge a premium price to refill it.
• Fuel Prices: Iceland's fuel prices can be higher than what travelers are accustomed to in other countries, impacting the overall cost of your Iceland car rental.

Calculate your fuel costs before picking your car rental in Iceland using this Iceland Fuel Cost Calculator

Additional Insurance

• Gravel Protection: Many roads in Iceland are gravel, and standard insurance may not cover damage caused by gravel.
• Sand and Ash Protection: Iceland's volcanic activity can cause ash and sand storms, which are often not covered by basic insurance.
• Wind Damage Protection: Iceland's strong winds can cause damage to car doors and other parts, which may require additional insurance.

Check out our Guide to Rental Car Iinsurance in Iceland

Age-Related Fees

• Young Driver Fee: Drivers under a certain age (usually 18 year old) may incur an additional fee.

This only applies to some suppliers, so be vary of the extra charge as it will be presented in the check out phase.

Equipment Rentals

• GPS Rental: While helpful, renting a GPS can come with an additional daily fee.
• WiFi Hotspot: Many travelers opt for a WiFi hotspot rental, which can add to the daily cost.
• Child Seats: Renting child seats or booster seats for kids can also incur extra charges.
• Roof Racks and Ski Racks: These may be necessary for certain activities and come with additional rental fees.

Northbound presents all extras available during the rental phase as well as the cost of each extra.

Seasonal Surcharges

• High Season Rates: Iceland car rental prices can be significantly higher during the peak tourist season (summer months).
• Holiday Surcharges: Renting a car during Icelandic holidays may result in higher rates.

Additional Driver Fees

• Additional Driver Fee: If more than one person will be driving the Iceland rental car, there might be an extra charge for each additional driver.

During Your Trip

Parking Costs

• Parking Lot Fees: Hourly or daily charges, especially in urban areas or tourist spots.
• Parking Garage (Lockable): Higher costs for added security, often charged per hour or day.

Check out Reykjaviks Parking Services webpage for further information.

Road and Tunnel Charges

• Tunnel Charges: Fees for toll tunnels like the Hvalfjörður Tunnel.
• App Fees for Tunnels and Parking: Transaction fees or minimum charges may apply for apps required for payments.

We made a blog post about Tunnel fee's and tolls in Iceland

Traffic Fines and Violations

• Speeding Tickets: Speed limits are strictly enforced, and fines are high.
• Parking Violations: Fines for illegal parking can add up, especially in urban areas.
• Traffic Camera Fees: Some areas have automated traffic cameras, and fines for violations are sent to the Iceland car rental company, which may add an administrative fee.

Here is a blog post about Traffic Laws in Iceland

Vehicle and Tire Issues

• Flat Tire: Potential high costs for repair or replacement, particularly in remote areas.
• Other Emergency Services: Charges for lockout assistance, fuel delivery, and other support if not covered by insurance.

Renting a car in Iceland, pain points and exploring the Island

Emergency Services and Support

• 24ra.is Services: Emergency caretaker services including towing and emergency start plugs, often not included in standard rental agreements.
• Towing a Car: High costs, especially in remote areas or outside business hours.
• Emergency Start Plug: Fees for battery jump-starts, particularly from third-party providers.

For those suppliers that don't have 24/7 road assistance, you can use 24 Road Assistance Page

Miscellaneous Fees

• Roadside Assistance: Basic roadside assistance may be included, but more comprehensive coverage might require an extra fee.
• Credit Card Fees: Some Iceland car rental companies charge extra for using certain credit cards.
• Administrative Fees: These can be added for processing fines, tolls, or other incidents.

Check out our blog post about Car rental prices for some inside information

Toll Roads and Bridges

• Toll Fees: Some roads and bridges in Iceland charge tolls, which may not be included in the rental agreement.

After You Leave

Additional Services

• Late Return Fees: Returning the car late can result in hefty additional charges.
• Cleaning Fees: If the car is returned excessively dirty, a cleaning fee may be charged.
• Key Replacement Fee: Losing the car key can be very expensive, as modern keys are costly to replace.

Recommendations to Avoid Hidden Costs

1. Understand the Rental Agreement: Read the fine print to know what's included in your Iceland car rental agreement.
2. Consider Comprehensive Insurance: Some offer insurance that cover flat tires, towing, and emergency services to avoid out-of-pocket expenses.
3. Download Necessary Apps: Get required apps for tunnel and parking payments before your trip.
4. Prepare for Emergencies: Know local emergency services and carry a basic roadside emergency kit.
5. Plan Your Parking: Research parking options to find cost-effective solutions.

By understanding these hidden costs and taking proactive steps, you can enjoy a smoother and more affordable car rental experience in Iceland.