Rental Cars in Iceland
Travelling around Iceland by rental car is one of the best ways to experience the country. Along the way, you can enjoy spectacular views, dramatic landscapes, and the freedom to stop whenever you discover a place you would like to explore more closely.
Your rental car is part of your package tour, and you can choose between Avis and Europcar when booking your trip, either through our website or with one of our travel consultants.
We work with both companies because they offer good vehicles and a high level of service. We generally recommend Europcar, primarily because our experience has been that they provide excellent service and are particularly helpful if anything unexpected comes up during your rental.
Prices
Our prices include unlimited mileage and Collision Damage Waiver (CDW). Unlimited mileage means you will not pay an additional charge based on how far you drive.
The deductible varies between rental car companies and depending on the type of vehicle you choose. Please see the information for each vehicle type for the applicable terms and conditions.
It is important to note that CDW does not cover all types of damage. For example, damage to the underside of the vehicle may be excluded. Both of our rental car partners offer an additional Super Collision Damage Waiver (SCDW), which significantly reduces the deductible. You can purchase this coverage when you pick up your vehicle in Iceland.
Vehicle Types
When booking a rental car, you choose a vehicle type rather than a specific make or model. The makes and models shown on our website are examples and illustrations of the vehicle type you are booking.
If you plan to drive in the Icelandic Highlands, you need a vehicle approved for driving on F-roads and for the conditions found in the Highlands. Always check that the vehicle type you choose is approved for your planned route. These vehicles are marked HL (Highlands).
Booking Rules
Rental cars are booked in 24-hour periods. For example, if you pick up your vehicle at 5:00 p.m., you must return it by 5:00 p.m. on the return date. If you return the vehicle later, you will be charged for an additional day, payable directly to the rental car company.
All drivers must have held a valid driver's license for at least one year. The primary driver must also provide a credit card as a guarantee when picking up the vehicle.
The minimum age for passenger cars and SUVs is 20. For motorhomes, the minimum age is 23. Age requirements may vary depending on the vehicle type and rental car company, so please check the information for your chosen vehicle type for the applicable requirements.
One-Way Rentals and Hotel Delivery
If you pick up your rental car at one location and return it to another, a one-way fee of approximately US$126–201 applies, depending on the vehicle type.
You can also arrange to have your rental car delivered to or picked up from your hotel in Reykjavík for a fee of approximately US$58. This service is available upon request.
Road Tax from 2026
Starting January 1, 2026, a new road tax applies in Iceland. For passenger cars weighing up to 3.5 metric tons, the charge is 6.95 ISK per kilometer driven, equivalent to approximately US$0.06 per kilometer based on the exchange rate on October 8, 2026. The charge applies to all vehicles, regardless of fuel type.
For rental cars, the road tax is charged by the rental car company after you return the vehicle. Both Avis and Europcar charge the fee to the credit card registered for the rental.
Motorhomes - Late Arrivals to Iceland
The motorhome pickup center closes at 6:30 p.m. If you arrive in Iceland after this time, a fee of approximately US$224 applies to have the motorhome brought out for you.
Insurance
See below for the insurance policies that apply to each car rental company.
