5 Things to Know Before Renting a Car in Iceland

Iceland is a breathtaking place and to see what it has to offer you will need to rent a car. While there are many group day tours available for those staying in Reykjavik, if you want to experience Iceland on your own schedule, to your own taste and, most importantly (for me) according to your own budget, I recommend renting a car and doing your own thing. Here are 5 Things to Know Before Renting a Car in Iceland that may help save on rental costs and save yourself some headache.

You Don’t Really Need a 4×4 or SUV to See Iceland’s Main Sights

Majority of the roads in Iceland are paved and easily accessible by a regular 2WD sedan. While you will need to drive down a gravel road to access certain sights like Dyrhólaey Arch or Seljavallalaug geothermal baths, if you pace yourself, avoid potholes and keep your distance from other vehicles, you will be just fine.

I roamed around Iceland on a tiny 2WD Chevy Cruze that was extremely cheap to rent at 27 EUR per day, and, as an added bonus – very fuel-efficient – as fuel costs can add up very quickly in Iceland.

Get Your Credit Card to Cover Gravel Damage

Iceland is known for its unpredictable weather and you can get stuck in a storm at any moment. Storms and gravel roads mean one thing – damage to your rental car and a hefty bill for repairs. Check if your credit card offers car rental insurance coverage. For example, our VISA would cover up to $50,000 in rental car damage, which was plenty for what 4 day road trip in Iceland may bring. Decline damage coverage from your insurance provider and opt in for “third party insurance”, let your credit card deal with the headache instead of you.

5 Things to Know Before Renting a Car in Iceland
5 Things to Know Before Renting a Car in Iceland

Examine Rental Car Before you Take it Off The Lot

Due to Iceland’s unpredictable weather, car rental companies have to charge renters for all and any bodily, mechanical or cosmetic damage done to each car. You will rent a car that is already slightly damaged and you will have to pay for any net new damage found upon return. To avoid paying for the damage done by the guy before you, make sure you thoroughly examine the car multiple times and have the rental company document all existing damage before you leave the lot.

When I got my rental car in Iceland, only three little scratches and dents were documented as existing damage. I was content with having something documented and was ready to get out of the bitter cold and wind of morning Reykjavik, get into the warm car and drive off. Thankfully, I spend a few more minutes examining the car and found ten more existing scratches and dents, including a giant dent in the windshield! If I did not stop and ask the rental company to document this damage, I would have been responsible for thousands of dollars in damage I did not cause.

Budget for Gas

Fuel is expensive in Iceland, roughly $8/gallon compared to $2.8/gallon in (Los Angeles, May 2017) – while sedan rental cars offered are usually fuel efficient (my Chevy Cruze was making roughly 40 MPG), if you end up renting an SUV or 4 x 4, you may need to adjust your budget.

According to my travel itinerary, I knew I would drive roughly 1,250 km over the 4 days in Iceland and budgeted $200 for gas. I am happy to say I stuck to that budget! Plan ahead and anticipate your costs to avoid any unpleasant surprises.

Parking in Reykjavik is Easy

Streets are full of meter parking spots and garages and parking is often free on weekends.

Pint it for later!

5 Things to Know Before Renting a Car in Iceland

What do you think about the above mentioned Tips for Renting a Car in Iceland? Did you have a different experience renting a car in Iceland? Share in comments below.

Things to Know Before Renting a Car in Iceland

5 Things to Know Before Renting a Car in Iceland