Car rental in Iceland – what you need to know

Renting a car in Iceland will give you more flexibility than if you travel by public transport or on an organised tour. You’ll be able to stop when and where you want, you won’t be waiting for others and you can travel much more independently. You can create your own itinerary (and change it if circumstances dictate) and explore at your own pace.

With all that said, there are many things to be aware of when renting a car in Iceland. This guide covers a number of issues you’ll want to consider.

Plan ahead!

Aside from the blip of the pandemic which affected travel the world over, Iceland has been steadily soaring in popularity. Foreign overnight visitors more than tripled from 672,773 in 2012 to more than 2.3 million in 2018. In 2022, it’s expected to be over 1.6 million and may well significantly exceed that figure given the international interest generated by the most recent volcanic eruption in the country.

In short, demand for tourist services remains high and it pays to plan ahead, especially with something like car hire, which tends to be booked some way in advance, if you want to get your first choice of vehicle. Leave it too late and demand may mean you’ll find yourself paying a premium for an inferior car.

Driving license

Driving licenses issued in the USA, Canada, the European Economic Area (EEA), Australia and New Zealand are valid for use in Iceland. If your driving license is issued from somewhere else, then you’ll need to check that it has a license number, is printed in Latin characters (Roman alphabet), includes your photograph and has not expired.

If you are unable to fulfil all of these requirements, you can apply for an International Driving Permit which is a travel document regulated by the United Nations. It’s essentially a translation of your domestic driving license so bring that along with you also. If in doubt, check with your car rental provider that you have the necessary documentation.

If you’re travelling with another driver and plan on covering long distances, it might be worth considering adding an additional driver. If you do this, you’ll need an appropriate license for that person, too, of course.

Remember also that, although you can drive from 17 years of age in Iceland, you must be at least 20 years old to rent a car in the country.

Type of car

There are a number of things to consider when choosing what car to rent. It goes without saying that you’ll…