How to Rent a Car in Iceland: Simple Guide for Travelers

Daniel Cramer Daniel Cramer

Daniel Cramer

4 min read
How to Rent a Car in Iceland: Simple Guide for Travelers
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If you're planning a trip to Iceland and wondering how to rent a car, you're not alone.

It's one of the most common questions travelers ask us.

Here's the short answer:
To rent a car in Iceland, you need to be at least 20 years old (23 for some vehicle types), hold a valid driver's license, and use a credit card.

Book online in advance, choose your pickup location (most go with Keflavik Airport (KEF)), and select a vehicle that fits your route and season.

That could be a small car for Reykjavík or a 4x4 for the Highlands.

Quick Summary

  • You can rent a car in Iceland if you're at least 20 years old and hold a valid license for 12 months.
  • Most travelers pick up their car at Keflavík Airport and drive straight from there.
  • Choose a 4x4 in winter or for Highland travel. In summer, a 2WD is fine for the Ring Road.
  • Book early to lock in the best prices. Free cancellation gives you flexibility.
  • Make sure to understand insurance options like Gravel and Sand and Ash Protection.
  • Driving in Iceland is safe if you check road conditions and drive according to weather.

Step-by-Step: Renting a Car in Iceland

1. Compare Cars and Suppliers Online

Use a local, trusted platform like Northbound to compare rentals across 30 or more suppliers.

Filter by car type, pickup location, transmission, price, or rental policies.

2. Check Your Eligibility

Most rental companies require:

  • Age 20 or older for standard cars (23 or older for larger or luxury vehicles)
  • A driver's license held for at least 12 months
  • A credit card in the driver's name

Tourists from the EU, USA, Canada, and most other countries can use their domestic license.

If it's not in Latin script, bring an International Driving Permit.

3. Choose the Right Vehicle

  • 2WD cars are fine in summer for main routes and city travel
  • 4x4s are highly recommended in winter or for F-roads (Highland roads)
  • Campervans are great if you're combining transport and accommodation

Need help? Check out our guide to choosing a vehicle.

4. Book in Advance

Rental prices increase quickly during peak season.

Booking ahead gives you:

  • Better availability
  • Lower prices
  • Time to review insurance and cancellation options

Northbound offers free cancellation, so you can lock in a deal early and keep your plans flexible.

5. Pick Up at the Airport or Downtown

Most travelers pick up their car at Keflavík International Airport right after landing.

You can also choose Reykjavík or other regional locations depending on your route.

Image of Keflavik Airport in Iceland
KEF Airport Iceland

6. Understand the Insurance Options

By default, rentals include CDW (Collision Damage Waiver).

You can also add:

  • Gravel Protection (GP) for rural travel
  • Sand and Ash Protection (SAAP) for South Iceland
  • Theft or Tire Protection for added peace of mind

Each option is explained clearly during checkout on Northbound.

You may also want to check out our guide to rental car insurance here

Common Questions About Renting in Iceland

Can tourists drive in Iceland?

Yes. Most visitors drive with their standard license. No special permits are required unless your license isn't in Latin characters.

Is it safe to drive in Iceland?

It's generally very safe, but road conditions vary. Some roads can be icy in winter or rough in the countryside. Always check safetravel.is and road.is before heading out.

How much does it cost to rent a car?

Prices vary by season and car type. For example:

  • Small 2WD in winter: from ISK 5,500 per day
  • 4x4 in summer: from ISK 15,000 per day
  • Campervan in peak season: from ISK 20,000 to 30,000 per day

Northbound compares prices across suppliers and shows final costs with no surprises.

What's the fuel situation?

Gas stations are common on the Ring Road. Most are self-service and accept cards only.

Fuel is expensive, so plan your budget accordingly.

We actually made a pretty cool fuel price calculator, click here to check it out!

Tips for a Better Rental Experience

  • Check mileage limits since not all rentals include unlimited kilometers
  • Add gravel protection if you're going beyond paved roads
  • Download Google Maps offline before your trip
  • Take photos of the car during pickup and drop-off
  • Never drive off-road since it's illegal, dangerous, and not covered by insurance

Want more advice? See our 25+ travel tips.

Renting a Car with Northbound

We partner with over 30 local suppliers.

Every booking includes:

  • Transparent pricing with no hidden fees
  • Free cancellation
  • Local support if anything goes wrong
  • Pickup options at the airport or downtown
  • Verified customer reviews from real renters

Ready to book?
Compare car rentals in Iceland now