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Top destinations to rent a car in Iceland

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Reykjavik

Reykjavik

What you need to know for your Iceland car rental

Reasons to book a car rental in Iceland

Renting a car in Iceland is a popular choice for those looking to explore and enjoy the stunning landscapes at their own pace. With a rental car, you have the freedom and flexibility to visit key attractions such as Reykjavik Harbour, which offers beautiful scenery, or the Blue Lagoon, an ideal spot for wellness and relaxation. You can also marvel at the Jokulsarlon Glacier Lagoon for its breathtaking views. Having a car allows you to easily manage your luggage and adapt your travel plans as needed, making it a convenient option for all types of travellers, whether you're seeking outdoor adventures, a romantic getaway, or simply a chance to explore. You can travel to vibrant cities like Reykjavik, where you can see landmarks such as Hallgrimskirkja and Laugavegur. Other destinations worth visiting include Vik I Myrdal, known for its Black Sand Beach and Reynisdrangar, and Selfoss, where you can discover the beauty of Kerid Crater and Urridafoss Waterfall. Renting a car ensures you can make the most of your time in Iceland, moving freely between these incredible sites and experiencing the diverse landscapes that the country has to offer.

Most popular car rentals in Iceland

  • Midsize SUV AWD: This vehicle is perfect for accommodating up to 5 travellers while allowing for the storage of up to 3 large suitcases. The Midsize SUV AWD offers ample space and comfort, making it an excellent choice for families, couples, or small groups. Its all-wheel drive capability is particularly advantageous when navigating Iceland's diverse terrain, ensuring a smooth and reliable journey regardless of the weather conditions.
  • Economy: An ideal option for solo travellers, couples, or families, the Economy car accommodates up to 5 travellers with space for 2 medium suitcases. This type of vehicle is excellent for those looking for a balance between cost-effectiveness and convenience. The Economy car offers the flexibility to explore Iceland without the burden of excessive fuel costs, making it a practical choice for budget-conscious adventurers.
  • Compact: The Compact car is designed to accommodate 5 travellers and offers storage for up to 3 medium suitcases. This vehicle is well-suited for solo travellers, couples, and families alike, providing a blend of efficiency and comfort. Its smaller size makes it easy to navigate through Iceland's scenic roads, ensuring you can park in tighter spots while enjoying the freedom to explore at your own pace.

Where to stay in Iceland

  • Reykjavik: As the capital city of Iceland, Reykjavik offers a unique blend of outdoor activities and family-friendly experiences. Visitors can enjoy the local landmarks such as Reykjavik Harbour, perfect for scenic views, and Hallgrimskirkja, a cultural highlight. Laugavegur street is ideal for shopping and dining, with various cafes and restaurants nearby. The best time to explore this vibrant city is during the summer months when the days are longer and the weather is milder, allowing for more outdoor adventures.
  • Vik I Myrdal: Known for its stunning natural beauty, Vik I Myrdal is an excellent destination for those seeking outdoor adventures and romantic getaways. The famous Black Sand Beach offers a unique beach experience, while the dramatic cliffs of Reynisdrangar provide breathtaking scenery. Visitors can also explore nearby waterfalls and parks. This area is best enjoyed in the summer when the weather is warmer, making it perfect for beach activities and exploration.
  • Selfoss: Selfoss is a charming town that attracts travellers looking for outdoor adventures and scenic beauty. Key attractions include the stunning Urridafoss Waterfall and the picturesque Kerid Crater, ideal for those seeking natural wonders. The area is also home to a national park, perfect for hiking and exploring. Selfoss offers a selection of restaurants and chocolate shops for dining. The best time to visit is during the warmer months when outdoor activities can be fully enjoyed.

10 tips to save on your car rental in Iceland

  1. Use filters to find the right car: Refine your search by selecting vehicle types and features. Whether you require an SUV for additional space, a convertible for summer outings, or an economical car for budget considerations, utilise the filters on Expedia to discover the best option for your journey.
  2. Book in advance to help lower costs: Rental prices can vary based on demand, so it's advisable to reserve your car well ahead of your trip. By booking in advance, you're likely to secure more competitive rates and enjoy improved availability, particularly during peak seasons.
  3. Consider a smaller car for savings: Smaller vehicles are typically more affordable to rent and easier to manoeuvre in crowded areas. Mid-size rentals offer a sensible balance of cost, comfort, and fuel efficiency.
  4. Age guidelines: Drivers under 30 may encounter higher deposits or daily surcharges, and certain vehicle categories—such as SUVs or premium models—might be unavailable. This can also apply to renters over the age of 70. Always verify the age requirements prior to booking.
  5. Check fuel policies: Some rentals require a full-to-full fuel policy, meaning you must return the car with a full tank to avoid additional charges. This is generally the most advantageous option. Others may offer full-to-empty or prepaid fuel options, which can also be suitable. Just be sure to return the car empty in this case.
  6. Save on city and airport pickups: You will often incur a surcharge for collecting your rental car at airports, but the convenience might justify the added cost.
  7. Know your payment options: Many car rental companies exclusively accept credit cards for payment.
  8. Understand your insurance coverage: Car rental insurance can help you avoid unnecessary expenses and provides peace of mind should something unexpected occur during your trip. It's straightforward to include car rental insurance when booking through Expedia.
  9. Consider unlimited mileage: If you plan to embark on long road trips, seek rentals that offer unlimited mileage to evade extra charges.
  10. Bring your driver's license and ID: A valid driver's license is necessary to rent a car.

Best time to rent a car in Iceland

The best value period to rent a car in Iceland is March, when prices are slightly low and demand is low. February also offers a quiet experience with even lower demand. Following this, May presents a similar opportunity with slightly low prices and average demand. In contrast, August tends to be the most expensive month due to high demand, along with June and July, which also see elevated prices and busy conditions. September represents another peak time with average prices but high demand.

When you visit Iceland, you want to see every bit of landscape and culture at your fingertips. Yes, there is plenty to do and see in this part of the world, but public transportation can only get you so far. To see some of the most hidden gems, your own set of wheels will come in handy. Iceland car hire makes it possible to see the area on your own schedule with ease. If you hear about a restaurant tucked away at the edge of your favourite neighbourhood, it’s no problem. When you want to see a late night show or early morning sunrise off the beaten path, your car makes that possible too. Cheap car hire in Iceland allows you to set your ideal itinerary without paying a fortune. Book incredible Iceland car rental deals right here on Expedia.com.au today. Whether you want a vehicle outfitted with luxury amenities, or a hybrid car with impressive gas mileage, you can find the perfect set of wheels on Expedia. From compact cars to spacious SUVs, we have loads of options to choose from and booking is just a few clicks away.

Frequently asked questions

What happens if I need to cancel my Iceland car reservation?
Our Customer Service Portal contains all the specifics about this. In the majority of cases, total refunds are provided if a booking is cancelled a minimum of six hours prior to collecting the car. Be sure to scan your car rental agreement to see if there are any exemptions.
What types of cars can I rent in Iceland?
Crowded city streets and narrow parking spaces are no problem for an economy car — the most in-demand type of rental in Iceland. Slide behind the wheel of one of these and get around traffic easily. Reliable, affordable and with terrific mileage, these small rides pack plenty of punch. But Iceland can be explored in almost any sort of rental you like. Compact, full-size and premium vehicles are some other options to choose from.
How do I find the best car rental deals in Iceland with Expedia?
Getting an amazing deal on your Iceland rental car is a breeze with Expedia. Choose your preferred ride, add in a few more details and compare prices from leading suppliers. Why not add flights and hotels to your booking? You'll get access to terrific discounts when you create a holiday package.
How old do you have to be to rent a car in Iceland?
Iceland rules state drivers must be 20 and above to be able to rent a vehicle. However, young drivers can expect a surcharge and tighter rental conditions. Many companies impose a young renter fee on top of the normal car rental rate. This covers the extra risk of accident or damage. While many car classes (like mid-size and compact) are available to young motorists, restrictions usually apply to luxury and specialty vehicles.
What do you need to rent a car in Iceland?
Renting a car in Iceland is a breeze. Generally, all you'll need is your driver's licence and a credit card in your name. After you've found your perfect set of wheels, check your policy to ensure there are no additional requirements prior to the pickup date.
Can I rent a car for a month or longer in Iceland?
You can. Expedia partners with quality suppliers that offer weekly and monthly rentals for all categories of cars. Pick up one of our long-term car rental deals and explore every bit of Iceland — or way beyond!
Where can I find an Iceland car rental if I am younger than 25?
Age policies are different between rental companies, so be prepared to do a bit of shopping around. Found an Iceland supplier that does rent to drivers under the age of 25? That's great! Just keep in mind that extra fees often apply to drivers between 21 and 24. The fine print of each rental car you're looking at should have all the information you need.

Car Rental Information

 
Popular Car Rental Types:
Hire a SUV, Luxury, Full Size, Economy
 
Airport to Hotel Transportation:
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