How to Save Money on Your Iceland Car Rental

Iceland is one of the most breathtaking travel destinations in the world, and the best way to experience it is by car. From the dramatic cliffs of the South Coast to the steaming geothermal springs of the North, having your own vehicle allows you to explore Iceland on your terms. However, renting a car in Iceland can be a significant part of your travel budget. The good news? With the right planning and by choosing the right rental company, you can save a lot—without sacrificing comfort, safety, or convenience.

At Zero Car Rental, we’ve built our business around transparent pricing and all-inclusive packages. That means no upsells, no surprise fees, and zero excess on your insurance. In this guide, we’ll walk you through how to save money on your car rental in Iceland, while getting the most value from your experience with us.

Book Early to Lock In the Best Rates

Car rentals in Iceland are in extremely high demand, especially during the summer months (June to August) and major holidays. The earlier you book, the more you’ll save. Prices rise as availability drops, and last-minute bookings often mean paying significantly more or settling for a vehicle that isn’t ideal for your itinerary. By booking several weeks—or even months—in advance, you’ll access better rates and a wider choice of vehicles.

If you're traveling during shoulder seasons like May or September, you may also benefit from lower demand and off-peak discounts. And in winter, while driving conditions require more caution, rental prices can be dramatically lower than in high season. At Zero Car Rental, our flexible booking policy allows you to reserve in advance with no deposit and free cancellation, so you can take advantage of early bird rates without losing flexibility.

Choose the Right Vehicle for Your Route

Iceland’s diverse terrain means choosing the right rental car is crucial—not just for safety, but for your wallet. If your trip involves sticking to paved roads like the Ring Road or the Golden Circle, a smaller 2WD car is perfectly suitable and far more fuel-efficient. These cars are typically the most affordable to rent and operate, especially if you’re planning to visit Iceland’s well-maintained tourist routes.

However, if your itinerary includes F-roads or highland destinations such as Landmannalaugar or Askja, then a 4WD vehicle is required by law. These rugged roads demand extra clearance and traction, and driving them without a proper vehicle can not only be dangerous—it can void your insurance. At Zero, our booking process makes it clear which vehicles are allowed on which types of roads, helping you choose the right option from the start.

Fuel efficiency is another key factor. Overestimating the size or power you need might lead to unnecessary fuel costs over long distances. A compact car may not be as flashy, but it can offer significant savings without compromising your Icelandic adventure.

Don’t Pay for Add-Ons You Don’t Need

Many rental companies offer a low initial price, only to tack on expensive add-ons when you arrive—insurance, GPS, Wi-Fi, child seats, roadside assistance, and more. These extras can inflate the cost of your rental by hundreds of euros. At Zero Car Rental, we do things differently. Our vehicles come fully loaded with everything you actually need—full insurance with zero excess, gravel protection, sand and ash coverage, unlimited mileage, and 24/7 roadside assistance—all included in the base price.

This means you don’t need to worry about buying additional protection at the counter or stressing over every scratch or chip. You can also avoid unnecessary tech rentals by downloading offline maps like Google Maps or Maps.me to your smartphone, which work just as well as a GPS unit. And if you’re traveling with children, check if your airline allows you to bring your own car seat at no extra cost, rather than renting one.

Save on Fuel with Smart Driving Habits

Fuel is one of the biggest ongoing expenses during a road trip in Iceland. It’s a good idea to refuel in larger towns where prices are generally lower than in more remote locations. Planning your fuel stops in advance and filling up when you have the chance can make a noticeable difference over the course of a week-long trip.

Efficient driving is also key to saving money. Maintaining steady speeds, avoiding hard acceleration or braking, and turning off the engine when idle can all improve fuel economy. And since Zero includes unlimited mileage in every booking, you can explore Iceland without worrying about per-kilometer charges adding up.

Share the Cost by Traveling with Friends or Family

Traveling in a group is not only more fun—it’s a great way to reduce costs. If you’re splitting the price of a rental car, fuel, and even accommodation between multiple people, your per-person cost drops significantly. Even if you choose a larger or 4x4 vehicle, it often works out cheaper per traveller than taking public transportation or guided tours. Also, rental cars in Iceland are a great option for first time travellers to our island!

Our fleet at Zero Car Rental includes vehicles suitable for solo travellers, couples, families, and groups. Whether you're heading off on a romantic road trip or an adventure with friends, we’ve got the right vehicle for you—always fully covered, with no hidden fees.

Skip the Lines with Keybox Pickup

Arriving at Keflavík Airport late at night or early in the morning? Don’t pay extra for out-of-hours service or wait in long lines after your flight. At Zero, we offer a seamless self-service keybox pickup system. This means you can grab your keys at any hour, head straight to your car, and start your trip immediately—no counters, no paperwork, no stress.

This service is particularly helpful if your flight schedule doesn’t match up with traditional rental office hours, and it’s one more way we help you save time and avoid unnecessary charges.

Avoid Penalties by Planning Ahead

One of the easiest ways to lose money on a rental is through avoidable penalties. Always return your vehicle on time—late returns can come with steep hourly or even daily fees. When you pick up your car, take a few minutes to inspect it and document any existing damage. This helps avoid disputes later on.

It’s also essential to follow Iceland’s road rules. Driving off-road is strictly prohibited and carries heavy fines, as well as the risk of damaging your vehicle. At Zero, we provide clear guidelines on where you can and can’t drive, and our insurance protects you on all legal roads—but not off-roading.

All-Inclusive Pricing Means Real Savings

Perhaps the most effective way to save money on your Iceland car rental is to choose a company with clear, transparent, all-inclusive pricing. Zero Car Rental offers a straightforward promise: the price you see is the price you pay. That includes full insurance with zero excess, unlimited mileage, roadside assistance, and convenient airport pickup. There are no surprise fees, no upsells, and no small print to worry about.

We also offer flexible payment options, including the choice to pay now or later, and always with free cancellation. That kind of peace of mind is worth its weight in Icelandic krona.

Travel Off-Season to Cut Costs

If your schedule allows, visiting Iceland outside of the high season is a smart way to save. Spring and fall offer mild weather, beautiful landscapes, and reduced crowds, while winter provides unique opportunities like glacier hiking and Northern Lights viewing. Car rental rates, flights, and accommodations are all typically lower outside of summer.

Zero Car Rental often offers seasonal promotions and discounts, especially on our small and medium-sized vehicles—ideal for couples or solo adventurers looking to experience Iceland on a budget.

Final Thoughts

Saving money on a car rental in Iceland doesn’t mean compromising on safety, convenience, or your overall experience. By booking early, selecting the right vehicle, avoiding unnecessary extras, and choosing an all-inclusive company like Zero Car Rental, you can travel smarter and focus on what truly matters: the journey.

See our fleet to find the perfect rental car for your Iceland adventure. No deposit, no excess, no hidden fees—just honest pricing and total peace of mind.

Zero Car Rental. Iceland, Simplified.