The Ultimate Guide to Car Rental in Iceland: Everything You Need to Know

Exploring Iceland by Car: Why It’s the Best Way to Travel

Iceland is a land of breathtaking natural wonders—volcanoes, glaciers, waterfalls, black sand beaches, and endless open roads stretching into the horizon. While there are tour buses and group excursions available, the best way to experience Iceland is on your own terms: by renting a car. Having your own vehicle allows you to travel at your own pace, stop at hidden gems, and truly immerse yourself in the country’s raw beauty.

But before you hit the road, there are some essential things to know about renting a car in Iceland. From choosing the right vehicle to understanding insurance options and navigating road conditions, this guide will help you make the best decision for a stress-free adventure.

Types of Rental Cars in Iceland

Not all rental cars are created equal, and your choice will depend on your itinerary, budget, and the time of year you’re visiting. Here are the main types of rental cars available in Iceland. We do not want to brag,  but Zero Car has the best selection of cars in Iceland but generally they are broken down in 3 main categories:

• Compact Cars – Ideal for city driving and short trips. These are great for exploring Reykjavik and the Golden Circle but may not be suitable for rougher terrains.
• SUVs/4x4s – A must if you plan to venture into Iceland’s Highlands or drive on F-roads. These vehicles offer better traction on gravel roads and in winter conditions.
• Campervans – Perfect for travelers looking to combine transportation and accommodation. Campervans allow you to sleep on the go, making them a popular option for budget-conscious adventurers.

Pricing and Rental Costs in Iceland

The cost of renting a car in Iceland varies based on factors such as the type of vehicle, rental duration, and the season. Prices tend to be higher during peak travel months (June–August) when demand is at its highest, while winter months offer more affordable rental options.

Here’s a rough breakdown of what you can expect to pay:

• Compact Cars: €50–€100 per day
• SUVs/4x4s: €100–€200 per day
• Campervans: €150–€300 per day

Additional fees may apply for GPS, extra drivers, child seats, and insurance upgrades, so be sure to read the fine print when booking.

Understanding Car Insurance in Iceland

Car insurance is one of the most important considerations when renting a car in Iceland. The country’s rugged landscapes and unpredictable weather mean that accidents and damage can occur more easily than in other destinations. Here are the main types of insurance coverage offered by rental companies:

• Collision Damage Waiver (CDW) – Covers basic damage to the rental car but usually comes with a high deductible.
• Gravel Protection – Essential for those driving outside of Reykjavik, as many roads are unpaved and can cause damage to the car’s undercarriage or windshield.
• Sand and Ash Protection – Recommended if you plan to visit the south coast or volcanic areas near Reykjavik, as strong winds can cause sandstorms that damage the vehicle’s exterior.

What is the best coverage for your car rental in Iceland?

Zero Car differentiates from all other companies by simplifying the process for you - no Insurances to choose from, no comparisons between coverages or levels of insurance, all covered and insured included in the price! The deal gets better since we also include Roadside Assistance in the pricing too, so even if you get stuck in the snow, have a flat or need help, you will be covered and we will be there to assist you.

Road Conditions and Driving Tips in Iceland

Driving in Iceland can be an incredible experience, but the country’s unique road conditions require extra caution. Here’s what you need to know:

• Gravel Roads – Many rural roads are made of gravel, which can be slippery. Drive slowly to avoid skidding or damaging the car.
• F-Roads – These are highland roads that require a 4x4 vehicle. They are closed in winter and can be challenging to navigate.
• Weather Changes – Iceland’s weather is highly unpredictable. It can shift from sunny to snowy within minutes, so always check the weather forecast before driving.

For real-time road and weather updates, use road.is and vedur.is to plan your journey safely.

Why Choose Zero Car for Your Iceland Road Trip?

When it comes to renting a car in Iceland, you want a reliable, transparent, and stress-free experience. That’s exactly what Zero Car Rental offers:

✅ Fully Inclusive Pricing – No hidden fees, just one simple price with full insurance included.
✅ Hassle-Free Rentals – Quick and easy booking with contactless pickup at Keflavik Airport.
✅ Reliable Fleet – Choose from economy cars, SUVs, and 4x4s suited for Iceland’s roads.
✅ Unlimited Mileage – Explore Iceland without worrying about extra costs.
✅ 24/7 Customer Support – We’re here to assist you every step of the way.

Ready to hit the road? Book your car with Zero Car Rental today and start your unforgettable Icelandic adventure