You’re planning a trip to the land of fire and ice: Iceland. For a country the size of Ohio, there’s a seemingly endless array of things to see and do, especially for outdoor enthusiasts. Some are satisfied with simply seeing the capital city, Reykjavík, taking bus tours, or visiting one of the world’s most unique knifemakers.
But to really experience all the country has to offer, you need to venture out farther. And to see that, you’ll need an Iceland car rental.
There is a dizzying array of rigs to rent in Iceland. Depending on where you want to go, what you want to see, and how many people are with you, it can be hard to decide what vehicle to choose. Here, I’ll outline what it’s like to rent a car in Iceland and offer guidance from firsthand experience to help make your visit to this iconic island as smooth as possible.
Iceland Roads

First, what are Iceland’s roads like?
Driving around Reykjavík is pretty much like driving around any other city. The rest of the country, however, can be quite different.
The Ring Road
Route 1, aka the Ring Road, runs 821 miles (1,322 km) around the entire country’s perimeter and is its major highway. I’ve circumnavigated Iceland twice on it, going counterclockwise both times.
The Ring Road is a mostly paved two-lane highway, but it’s narrow compared to North American standards and usually lacks shoulders. The maximum speed is just 90 km/h or about 56 mph, meaning you’ll often need to pass slower traffic, including bicyclists, buses, semis, sheep, and slow-going sightseers.
There are also a multitude of one-lane bridges, gusty winds, and regular inclement weather. The Ring Road demands a healthy heap of respect.
Iceland’s peak travel season is June through August, and snow isn’t common then. But for much of the year, the island’s byways can be snow-covered, slippery, and sometimes impassable. This includes the Ring Road.
Dirt, Gravel, and Mountain ‘F-Roads’

Renting a Car in Iceland: Considerations

4WD vs. 2WD

How Many People?

Iceland Rental Car Options

How to Pick the Right Rental
- Subcompact 2WD hatchbacks: The least expensive two-person road tripper — fuel-efficient and versatile. No F-road adventures here.
- Common examples: Hyundai i10, Kia Picanto, Toyota Aygo, Yaris
- Midsized 2WD vehicles: When you’ll stick to the main roads but need more space than a subcompact. Opt for a wagon for cargo-carrying versatility.
- Common examples: Dacia Jogger, Hyundai i30, Kia CEED, Toyota Corolla
- Compact AWD crossovers: Often have more ground clearance and traction than 2WDs, especially if venturing onto dirt tracks. Some rental agencies will allow them on F-roads, but check first.
- Common examples: Jeep Renegade, Mitsubishi Eclipse Cross, Suzuki SX4, Toyota RAV4
- Small-to-midsized 4x4s: If you’re tackling more difficult terrain, having a true four-wheel-vehicle is a good choice for better off-pavement performance. Only usually good for one to three people.
- Common examples: Dacia Duster, Suzuki Jimny
- Larger 4x4s and pickups: For the ultimate off-pavement adventures, these vehicles carry more people, additional cargo, and can tackle the most difficult terrain. They’re the least fuel-efficient and generally the most expensive to rent.
- Common examples: Jeep Wrangler, Land Rover Defender, Toyota Land Cruiser, Toyota Hilux
- Campervans: Campervans can provide all-inclusive camping setups. No need to pitch a tent in the elements — you sleep inside. Many have in-van stoves, too. Check how many seats there are if traveling with more than two people. Some are 2WD, some are AWD/4WD.
- Common examples: Renault Master Camper, VW vans
Fuel Is Very Expensive


Icelandic Rental Car Prices


Iceland Rental Car Insurance


Can I Take My Car Anywhere?

Choose Your Iceland Car Rental Wisely
