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Car Rental in Iceland
In Iceland, a car is more than transportation—it's the key to exploring geysers, black sand beaches, and the Northern Lights beyond the reach of bus schedules. Compare offers from local rental companies and choose your exact vehicle with photos.
Cities
Cities: Iceland
All cities with built-in car search. Each page has a ready search, prices by class and rental terms.
Terms
Rental terms in Iceland
The basic rules of most rental providers in the country. Exact terms of a specific offer are shown in the city search before payment.
- Driver age — from 20 years.
- Driving experience — from 1 years.
- Drivers under 25 pay a young-driver surcharge.
- Fuel policy: “full-to-full”.
- Basic insurance (CDW/TP) is included in the price.
- A Full CDW package reduces the excess to zero.
- No-deposit rentals are often available.
- National driving licence.
- Driver’s passport.
- International Driving Permit (IDP) — if your licence is not in Latin script.
- A bank card in the driver’s name for the deposit.
On the road
Driving rules in Iceland
A driver’s guide for the country — common traveler questions: currency, fuel, speed limits, toll roads.
| Currency | ISK |
|---|---|
| Speed limits | 50 city · 80 rural · 90 expressway (km/h) |
| Blood alcohol limit | up to 0.2 ‰ |
| Daytime headlights | required |
| Vignette (toll roads) | not required |
| Winter tyres | mandatory from 01.11 to 15.04 |
Traffic rules: Iceland
- Right-hand traffic.
- Speed limits: 50 km/h in urban areas, 80 km/h on gravel roads, and 90 km/h on paved rural roads. There are no motorways in Iceland.
- Low-beam headlights are mandatory at all times, throughout the year.
- The legal blood alcohol limit is 0.02%; in practice, a zero-tolerance approach is applied.
- Seat belts are mandatory for all occupants. Children under 12 years old or shorter than 150 cm must use an appropriate child restraint system.
- Mobile phones may only be used with a hands-free system.
- Winter tires are mandatory from November 1 to April 15. Snow chains are prohibited.
- Driving off marked roads is strictly prohibited and may result in fines of up to 100,000 ISK. This also applies to off-road driving on tourist routes.
- There are no motorway vignettes. Since January 2026, Iceland has introduced a distance-based road tax, automatically calculated by the rental company based on the vehicle’s odometer.
- The Vaðlaheiðargöng tunnel in northern Iceland is a toll road costing approximately €11 for passenger cars. Hvalfjarðargöng Tunnel has been free of charge since 2018.
- Speeding fines are substantial and enforced by fixed speed cameras. Fines are forwarded through the rental company.
- On single-lane bridges, priority is given to the vehicle that enters the bridge first. Animals on the road always have priority.
Questions
Frequently asked questions about car rental in Iceland
License, deposit, border crossing, driver age and toll roads.
Do I need an International Driving Permit to rent a car in Iceland?
If your driver’s license is issued in the Latin alphabet (such as most European and US licenses), your national driver’s license is sufficient. If it is issued in Cyrillic, Arabic, or another non-Latin script, you need an International Driving Permit (IDP) or a certified translation.
What is the minimum age to rent a car?
Most rental companies rent standard cars to drivers aged 20 and older with at least one year of driving experience. SUVs and camper vans usually require drivers to be 23–25 years old. Drivers under 25 may be charged a young driver fee.
Where can I pick up and return the car?
The main pickup location is Keflavík International Airport (KEF). Vehicles are also available in Reykjavík, Akureyri, Egilsstaðir, and Höfn. Many companies offer hotel delivery or delivery to other locations on the island.
Can I drive on Iceland's F-roads?
Highland F-roads may only be driven with a four-wheel-drive vehicle. Driving on these roads with a standard vehicle invalidates your insurance. Always confirm vehicle restrictions with the rental company before booking.
Is a security deposit required?
Deposit requirements depend on the rental company. Some companies offer no-deposit rentals with full insurance, while others block a deposit on the driver’s bank card. Exact conditions are shown for each vehicle.
Which insurance should I choose?
Basic CDW insurance is legally required and included in the rental price. However, it does not cover damage to the underbody, suspension, or water damage. If you plan to drive beyond paved roads, extended coverage with gravel protection and full insurance is strongly recommended.
What is the fuel policy?
The standard policy is ‘full-to-full’: you receive the vehicle with a full tank and return it full. Fuel stations outside larger towns are limited, so monitor your fuel level carefully, especially when driving the Ring Road.
When is the best time to book?
Summer (June–August) is the busiest season, and vehicles at Keflavík Airport sell out quickly. More vehicles are available during winter, but be sure to confirm that winter tires are fitted between November 1 and April 15. Early booking is recommended year-round.
Nearby
Similar destinations
Neighboring and kindred countries of the Balkans and the Caucasus with built-in car search.
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