Local Car Rental in Iceland ⭐ Cheapest Car Rental in Reykjavik

• In Iceland, you'll encounter different types of roads, ranging from well-paved highways to gravel roads and rough mountain tracks, so make sure to choose the right rental insurance depending on your travel itinerary! For extra peace of mind, consider adding gravel protection to avoid unexpected costs from loose stones damaging your rental car, and theft protection to safeguard against any unforeseen incidents during your trip.
• The amount of insurance policies you can take out with your rental car in Iceland can be over whelming! If you're not 100% sure about which insurance to choose… Get our all-in-one Platinum Insurance Bundle! This package includes comprehensive coverage, including gravel protection and theft protection, and you can also opt for tire insurance to cover potential damage from Iceland’s rugged roads.
• If you're planning to explore the more remote parts of Iceland, such as the Icelandic Highlands, you'll need to take on the famous F-roads. It's crucial to avoid driving on the F-roads unless you rent a 4x4 vehicle, the weather is favorable, and the roads are officially open. Driving off-road is illegal and punishable, so don't even think about it! Off-road driving is illegal in Iceland due to its environmental impact and can result in fines or imprisonment.

• Driving in Reykjavik is generally smooth and stress-free, thanks to well-maintained roads and relatively light traffic compared to other capital cities. That said, Iceland has a few unique driving rules to keep in mind. For example, headlights must be turned on at all times — yes, even during the day and in summer’s endless daylight! It’s all about visibility and safety, which is a top priority on Icelandic roads.
• Speed limits in Iceland aren’t just suggestions, they’re strictly enforced, especially in sensitive areas like school zones where limits can be even lower. In urban areas like Reykjavik, the standard speed limit is 50 km/h (31 mph), while in rural areas you’ll typically find a limit of 90 km/h (56 mph) on paved roads and 80 km/h (50 mph) on gravel roads. It's important to stick to these limits not only to avoid hefty fines but also to stay safe on Iceland’s often unpredictable roads.

• Once you leave the city and hit the more remote routes, keep an eye out for wandering sheep — they roam freely, and they’re not great at checking both ways before crossing.
• Iceland’s weather can shift dramatically in a matter of minutes, especially in mountainous or coastal areas. It’s always a good idea to check the weather forecast and road conditions before heading out, just to make sure your journey is as safe (and scenic) as possible.
• To ensure a safe and enjoyable trip, keep your lights and seatbelt on at all times and only use your phone if you have a hands-free kit. Also, be extra cautious when opening your car door in windy areas, as strong gusts can cause damage or even rip the door out of your hands unexpectedly.
• If you're going to be hiring a car in Iceland during the winter, having the right equipment is crucial. Winter tires are essential for handling Iceland's icy and snowy roads, so make sure your rental car comes equipped with them (and add them if it doesn't). Also, drive slowly and carefully at all times, and be aware of the shorter daylight hours and potential sudden snowstorms that can worsen visibility.

• Iceland is experiencing a world-wide BOOM. Hotels are overbooked and car rentals are running out of keys to hand over! Make sure you book your Iceland car rental in time, or you'll be stuck with day tours and constrained by public transport.
• Not sure about what places to visit on your Iceland road trip? A no-brainer option for a first glimpse of the country, and to visit some of Iceland's most breathtaking tourist destinations, is the Ring Road. This route is perfect for an unforgettable Iceland road trip, allowing you to experience everything from glaciers to volcanoes at your own pace. Additionally, the Diamond Circle is a great detour that you can add to your travel itinerary if you want to experience the rugged beauty of Iceland's north, taking you to hidden gems like Dettifoss, one of Europe's most powerful waterfalls, and Lake Mývatn, a volcanic lake surrounded by lava fields and geothermal activity.
• If you are are coming from the USA, know that rental prices often include unlimited mileage and VAT so you don't have to add taxes on top of the price!

With plenty of car rental locations across the country — including Keflavik International Airport and Reykjavík, finding a rental car company that fits your needs and itinerary is easier than ever with Reykjavik Cars!

Before you hit the Icelandic roads, make sure you're eligible to rent in the first place. The minimum age requirement is 21 years old for small cars, and 23 years old if you're looking to rent a larger SUV or 4x4 vehicle.

Next, check that you have a valid driver’s license and a credit card in your name — both are essential for the booking. Your license must be written in English or use the Latin alphabet. (So, if it’s in Cyrillic, Greek, Chinese, or Arabic, you’re going to need an international driving permit, sorry!) The good news? Most international licenses are accepted — just double-check in advance to avoid surprises at the counter.

Once that’s set, just head to the website, scan through our top deals and book online with a small deposit. Keep an eye on the rental period, rental price, and any available extras like GPS, baby seats, or additional insurance. At Reykjavik Cars we also offer free cancellation, giving you the flexibility to adapt your plans as needed.

Before you rent a car, make sure you understand your rental agreement, including what's covered and what's not. You’re pretty much good to go. That’s it!

So, if you're planning to explore Iceland at your own pace, there's no better way than to rent a car and take the wheel. With the right car rental company, like Reykjavik Cars, you're not just getting transportation — you're unlocking the freedom to discover every glacier, volcano, and waterfall this country has to offer. Your Icelandic adventure is just a few clicks away.