Iceland Car Hire

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Iceland is a Nordic island nation in the North Atlantic, 280km east of Greenland, 400km north west of the Faroe Islands and 950km north west of Denmark. It has a land area of 103,000 square kilometres and is Europe’s second-largest island after Great Britain.

Despite its reasonably large size, Iceland’s population density is low ̶ only 320,000 people live here, over half of whom reside in and around the capital Reykjavik.

This is a country of exceptional natural beauty where large tracts of territory are uninhabited and you’ll find glaciers, lava fields, sand and stone deserts, active volcanoes, geothermal pools and clean skies offering clear views of the Aurora Borealis (Northern Lights). The weather can be changeable and but it’s more moderate than many visitors expect thanks to the Gulf Stream, which produces cool summers and reasonably mild winters. Due to its location just under the Arctic Circle, Iceland is known as the Land of the Midnight Sun as for much of June the sun never sets in its far northern regions. Its culture mixes traditional and contemporary elements in an eclectic blend and it’s a progressive nation where every visitor receives a warm welcome ̶ once you’ve visited once, you’ll definitely want to return time and time again.

Prices for hiring a car in Iceland start at €28 per day for an economy car like a Peugeot 208 if you book off-season, a small vehicle like a Suzuki Jimny is €38 a day, and a Toyota RAV4 SUV ̶ ideal for road trips in the rugged countryside ̶ is €60 a day. Hire a car in Iceland with Enjoy Travel and amazing adventures await, but first, here are a few fascinating facts about this cool country:

  • About Iceland: to the casual observer, this country is probably best-known for its dramatic topographical features moulded by volcanic activity and geothermal energy ̶ from bubbling mud pools to gushing geysers and rumbling volcanoes to gorgeous glaciers dividing majestic mountains, Iceland is a nation where the land itself is always in a spellbinding state of flux. Popular attractions include the Blue Lagoon geothermal pool in Reykjanes Peninsula, the Westfjords with their sheer sea cliffs, multicoloured beaches, Arctic foxes and bird colonies, and Reykjavik’s uber-cool craft beer bars, artisan coffee shops, chic boutiques and fascinating museums.
  • Famous Iceland: well-known sons and daughters of Iceland include Sugarcubes singer and solo artist Björk, politician Vigdís Finnbogadóttir, who was elected as president of Iceland in 1980 and was re-elected a further three times, poet, journalist and playwright Halldór Laxness, and astronaut and scientist Bjarni Tryggvason.

Guide to Iceland

Despite its small population and isolated position, Iceland is anything but a global backwater ̶ it has more natural attractions than many much larger nations, punches above its weight in global sports, has a distinct and well-developed culture and leads the way in many progressive socio-political spheres.

Awesome nature

With geysers, mountains, volcanoes, glaciers and more, perhaps no nation does dramatic nature better than Iceland.

For starters, if you’re based in Reykjavik, Thingvellir National Park is only 40km away and it’s home to some of Iceland’s most arresting natural scenery. A UNESCO heritage site, highlights here include the Silfra gorge, the tectonic rifts where the North American and Eurasian continental plates are split, Iceland’s biggest lake, Ϸingvallavatn, and amazing bird species like Merlins and Great Northern Divers.

Lake Myvatn is another magical area you shouldn’t miss. Located in the north of lceland and close to the city of Akureyri, this geothermal lake is blessed with bubbling mud pools, volcanic craters and ancient lava formations, which mean that in the height of summer, under the midnight sun, it’s more reminiscent of Mars than Earth.

Cool culture

Just as Iceland’s volcanic underbelly means its terrain is always remaking itself, Iceland’s artists, thinkers and regular citizens are endlessly creative. The entire country, from capital Reykjavik to fishing villages packed away at it’s most remote corners, is packed with galleries and museums, and The Reykjavik Arts Festival and music festivals such as Airwaves showcase local and international talents to guests from all over the world. But you’ll find live music here all year round, in genres that span rock to funk and hip-hop, and Iceland has spawned many popular contemporary acts which have progressed to international success, such as Kaleo, Emiliana Torrini and Of Monsters and Men. Meanwhile, fans of classical music shouldn’t miss visiting the Harpa Concert Hall to take in a pitch-perfect performance from the Icelandic Symphony Orchestra.

There’s also a vibrant visual arts scene in Iceland, with ground-breaking artists like painter Johannes Kjarval and sculptor Einar Jonsson at its vanguard, and Iceland has a proud literary heritage, exemplified by writers like Einar Már Gudmundsson and Andra Snær Magnusson, as well as seminal bodies of work like the Icelandic Sagas.

The most popular sports here are golf, handball, athletics, equestrian, badminton and, last but not least, football ̶ the men’s national football team has enjoyed amazing success in recent years, reaching the quarter finals of UEFA Euro 2016 and becoming the smallest nation ever (by population) to qualify for a FIFA World Cup, in 2018.

Progressive politics

Certainly since the economic crash, Iceland has fostered a reputation as an inclusive society with a string sense of civic duty and commitment to the principles of good governance and accountability ̶ this is possibly best personified in its current Prime Minister Katrín Jakobsdóttir, who at 44 is one of the world’s youngest national leaders, is a mother to three boys and is passionate about environmental issues, feminism and pacifism.

Historic Iceland

Ingolfur Arnarson was a Norwegian Viking and is widely regarded as the first permanent settler in Iceland, having made his home in the area of present-day Reykjavik in 874AD. The Althing, the world’s first parliament, was founded by Viking settlers in 930AD and a constitution was drafted based largely on land ownership and individual freedom. Another early Viking visitor was Erik the Red, who arrived here from Norway after being expelled for murder, only to be banished from Iceland for the same crime, but not before fathering Iceland’s most famous son, Leif Eriksson, also known as ‘Leif the Lucky’. Eriksson became the first European to reach North America, in 1000AD, nearly 500 years before the exploits of Christopher Columbus.

Iceland also adopted Christianity as its main faith around the year 1000AD and prosperity followed, but Norwegian King Haakon imposed punitive taxes and trade embargoes in 1262AD and these damaging economic impositions were maintained when Iceland was subsequently taken over by Denmark. The next six centuries were a dark period during the nation’s history, during which natural disasters, poverty and disease threatened its very existence. However, an independence movement started in the early 19th Century under the leadership of Jon Sigurdsson eventually provided hope for a national renaissance, the trade monopoly ended in 1854, domestic autonomy was in place by 1874, home rule by 1904 and limited sovereignty by 1918. Iceland finally broke all ties with the Danish crown in 1944 and established independence ̶ Icelandic Independence Day is celebrated annually on national here Sigurdsson’s birthday, June 17th. Iceland was one of the first nations to be impacted severely in the economic crisis of 2007/08 which became the Great Recession, but recovered remarkably well compared to many larger nations and today it’s a sophisticated nation with a lively arts and cultural scene that complements its sublime natural scenery and rich history.

What to visit in Iceland?

From natural attractions to social distractions, you’ll never be bored in Iceland and there’s plenty of entertainment to be found for all ages and tastes.

See the Northern Lights

For many nature lovers, seeing the Northern Lights (or Aurora Borealis) is a bucket list wish they can’t resist. This dancing display of green, blue and purple light hues has to be seen to be believed, and Iceland is perhaps the world’s best place to witness its wonders. You can see the Aurora Borealis from Reykjavik despite its higher comparative levels of light pollution, but sweet spots for spectacular selfies include the Hvolsvöllur church in the small town of the same name some 106km east of the capital, the Skógafoss waterfall on the southern coast and the Kerid crater in the south west, where the lightshow is magnified to magnificent proportions when it’s reflected on the crater’s lake.

Chill out in a hot spring

The tradition of taking a dip in a volcanically heated pool stretched back to Viking days and you simply can’t leave Iceland without trying it for yourself. You won’t struggle to find hot springs, but some of the best examples are Nauthólsvik geothermal beach in Reykjavik and the iconic Blue Lagoon at Reykjanes located off the highway between Reykjavik and Keflavik airport, where the electric blue water is striking, the white silt purifies the skin and there are endless grottoes and steam rooms to relax in.

Party like a Viking!

If you really want to let your hair down and get your horns out in Iceland, there are plenty of places to have a night out that the wildest Viking would be proud of. For instance, Pablo Discobar in Reykjavik is a wonderfully kitsch after hours spot where you can dance like no one’s watching amidst the outlandish décor and Olstafa Akureyrar in Akureyri is a friendly Icelandic bar serving superb local beer.

Getting to and from Iceland

Traditional Icelandic delicacies include dishes like plokkfiskur (mashed fish stew), salted cod flatbreads and skyr, a creamy dairy product that’s somewhere between cottage cheese and yoghurt. However, you’ll find both local and international dishes, so there’s something to suit every palate.

Gourmet hot dogs

Although hotdogs are usually regarded as American fare, patrons of Reykjavik’s famous Bæjarins Beztu hot dog cabin near the waterfront will swear that their version of this fast food classic is the world’s best and since it’s open until 4am, it’s a favourite pitstop for late night revellers. These dogs taste best served with the full monty of remoulade, ketchup, onions and mustard  ̶  they’re around €3.50 each, but order two because they’re so tasty that one is never enough!

Fine dining

Dill restaurant in Reykjavik was the first in Iceland to be awarded a Michelin star and when you dine here, you’ll understand why. Specialising in fresh, sustainable and delicious local ingredients, it’s a real treat for foodies  ̶  try the salted cod with pork belly, potatoes, pearl onions and angelica and you’ll be in seventh heaven. For around €57 you can order a seven-course feast packed full of divine local delicacies.

Super sushi

If you’re a fan of sushi, don’t miss Rub 23 in Akureyri, Iceland’s second city. This is a laid back but super-stylish spot where the tuna hosomaki is really something to write home about. Main courses cost around €30.

Hiring a car and getting around Iceland

Airports and access

The main airport in Iceland is Keflavik (KEF). It’s located 3km west of Keflavik and 50km southwest of Reykjavik. KEF processes around 10 million passengers annually from many international locations, but most visitors come from the United States, followed by the United Kingdom and Germany in second and third place.

Driving around Iceland

With such mind-blowing scenery on offer, you won’t be surprised that there’s some spectacular driving available in Iceland. Take a look at some of our favourite road trips:

If Route 1 sounds a little too ambitious, the Golden Circle is a more manageable road trip in close proximity to Reykjavik and its 300km can be completed in around three and a half hours although you should give yourself a full touring day of around 10 hours if you want to pace yourself. This route is a loop that takes you from the capital into the southern uplands and back and the main stops are the Thingvellir National park, Gullfoss waterfall and Haukadalur geothermal area which includes the Strokkur and Geysir geysers.

Driving tips

You always drive on the right side of the road in Iceland. Speed limits are 50 km/h (31mph) in towns and cities, 80 km/h (49mph) on country roads and 90 km/h (55mph) on major roads.

Seat belts are obligatory for the driver and passengers, mobile phone use is prohibited unless it’s hands-free and there’s zero tolerance for drink driving.


Public transport in Iceland is delivered by buses only and although the service within Reykjavik is reasonable, the standard across the island doesn’t quite meet the standards of some other European nations, therefore travelling by car is probably preferable. However, the Reykjavik City Card is quite convenient and provides you with 24, 48 or 72 hours unlimited travel on the bus system.

Top Tips when hiring a car in Iceland

● Travelers to this beautiful island that would like to explore its wildlife and scenic parts at your own pace would be advised to go for an Iceland car hire. Public transportation is not nearly enough to allow you to move around freely and it's very limited apart from popular cities where rental cars shine.

● If you're planning to rent a car, you should familiarise yourself with the different car rental locations in Iceland. Besides Reykjavik International Airport, Keflavik International Airport and Akureyri Airport, most car hire locations and car hire companies will be found within the city proper of the big cities.

● Most car hire companies are located in the capital city of Reykjavik, but it's easier to pick up your cheap car hire at a car hire company at Reykjavik Airport. This will offer great travel flexibility right at Iceland's doorstep as the pick up location is right where you arrive thus you save time.

● Picking up your car rental from the Airport will make for a much better initial experience. Also car rental companies in the airport are known to offer more options in rental car options and also much better car hire prices compared to car hire locations found in the bigger cities.

● There is no best car hire company but all the car rental companies in the Airport are diverse when it comes to rental car models and also reservations with a lot of time in advance are rewarded with the best car hire deals.

● Any car rental company found in Keflavik International Airport has its own share benefits, so regardless of where you land you have a variety of options for your hire car. One of the better advantages of hire cars picked up at the Airport is the ease of the booking process.

● Some of the most popular Iceland road trip routes throughout Iceland are the Golden Circle, Snæfellsnes Peninsula, and of course the 10-day roundtrip in the ring road.

● Most users that decided to try the road trips were pleased to go with a car rental for the journey. Especially those who opted for off road driving.

● If you're planning to book a hire car, remember to bring your driver's license with you. A special or international driver's license is not required to rent a car in Iceland. It goes without saying that for your own safety you should obey the traffic laws and the speed limits closely.

● A great number of user found car hire offers in Iceland for less than £37.

● Blue car rental have proven to be very popular among visitors.

● Booking your hire car in Iceland in advance by at least 1 day before your journey begins, will ensure you get better car hire deals.

● Mini hire cars in Iceland are generally cheaper and more popular than different other car types and models on average.

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FAQs about car hire in Iceland

Most frequently asked questions about hiring a car in Iceland

When you book in advance, a small car like a Volkswagen Up in Iceland costs just €27 a day and an economy car like a Toyota Yaris costs €29 a day.
Prices for a small car like a Peugeot 108 start at just €26 a day during off-season.
The minimum age for hiring a car in Iceland is 20 and you must have held your licence for one year. Some companies apply a surcharge for drivers under 25 so please check.
Yes  – extra drivers can usually be added as long as their license is valid, and an additional daily fee is paid.
A comfortable nine-seater like a Ford Tourneo is perfect for trips into the stunning wilderness in Iceland.
You should call your rental company right away if you have an accident. In the unlikely event you have a serious accident in Iceland, call 112 immediately for emergency services.
Iceland is an expensive country, especially when it comes to food, but taking a few small considerations and deciding where you want to indulge yourself, it can still be very affordable compared to the rest of Europe.
Renting a car in Iceland is not exactly cheap, especially in high season, but it is worth it and, if you want to visit many places, in the end it is more cost effective than hiring many excursions.
Driving in Iceland in summer is a blessing, but in winter it can be hell. Watch out for the strong winds. Driving in the summer is a pleasure; as soon as you leave Highway 1 you are practically alone. Consequently, driving at 90 km / h allows you to enjoy the scenery. Driving in winter is difficult and can be dangerous because of snow storms.
The island known as the island of ice and fire is full of places that are well worth visiting. Any visit deems it essential to begin exploring the Polar Lands from the Blue Lagoon and take it from there.
Temperatures in Iceland generally do not change drastically from season to season, but are rather moderate. The best time to visit the country is during the summer months (June to September) or at the end of spring (between May and June).
For small cars the budget friendly options begin at £123 for a week, which means more or less £17.50 a day.
The cheapest offers allow you to rent a car for a whole month for £494, or £16.45 per day. As mentioned earlier, this depends on the season you book and the car type.
The average price of a litre of fuel in Iceland can vary between ISK 239 and ISK 213.

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