Are Iceland City and Economy Car Rentals the Right Option for You?

An Iceland city and economy car rental sounds like the perfect choice, but are they suitable for your trip and itinerary in Iceland? Let’s find out.

iceland economy car on the Ring Road

blog author By Anna Hart shield verificationVerified Expert

    Want to find out which type of car is best for your big Icelandic adventure? Read all about city and economy car rental options here, including where and when these cars are suitable, costs, types, other options and our top driving tips.

    Discovering Iceland in an economy or city car

    Thinking about whether to rent a car for your trip to Iceland? Driving is by far the best way to explore ‘the Land of Ice and Fire’. As there is no public railway system, traveling by car is often the only way to reach some of Iceland’s exceptional natural wonders.

    From icy glaciers to warm geothermal pools, fierce volcanoes and stunning mountains, Iceland’s incredible scenery begs to be explored!

    Home to artisan coffee shops, captivating museums and trendy craft beer bars, Iceland’s capital, Reykjavik, will be fully accessible to you in an economy or city car.

    iceland economy car on the Ring Road

    What are economy and city cars?

    Economy and city cars are two-wheel drives that are usually smaller and cheaper to rent. You can normally fit up to four people in these vehicles, depending on how much luggage you bring along.

    You’ll find both automatic and manual economy and city cars available to rent in Iceland. It’s good to bear in mind that some manual options are cheaper than automatics. At Reykjavik Cars, we offer a full range of options for economy and city car rentals in Iceland, so check our options before booking some expensive tour, as you might be able to do the same tour on your own with one of our vehicles.

    How much does it cost to rent an economy or city car in Iceland?

    Renting an economy or city car for one week in Iceland costs, on average, around 215€ (30K Icelandic Króna). Of course, this varies depending on the type of car you choose and the season in which you rent.

    We recommend taking a look at our fleet of economy and city car rental options even if you are traveling on a budget with a group of friends since in some cases getting two small cars might cost less than renting a minivan in Iceland.

    Iceland economy car on a Road trip

    Types of economy and city cars you can rent in Iceland

    Both the Toyota Aygo and the Hyundai i10 are two of the most popular economy and city cars you can rent in Iceland. These affordable and practical options are perfect for discovering the beautiful scenery of Iceland.

    Suzuki Swift, Hyundai Kona, Kia Ceed, and Kia Niro Hybrid are also popular models for city and economy car rentals in Iceland. Browse through the full list of available models before nailing down your top pick.

    Where can you go in an economy or city car in Iceland?

    Discover the wonder of Iceland’s coastal capital, Reykjavík, and its surrounding towns in your economy or city car rental. No matter what time of year you choose to visit, an economy or city car is a great option for your Icelandic city break.

    These vehicles are perfect for exploring Iceland’s stunning capital, which is home to more than two-thirds of the country’s population. Fun fact: Reykjavík is also the only place that’s considered a proper city in the country!

    Reykjavik City panoramic view

    You’ll be able to travel further afield to Reykjavík’s nearby towns in an economy or city car. The handy Ring Road, Iceland’s main motorway, will take you all around the island in a loop, allowing you to discover some of Iceland’s most popular natural landmarks.

    Among these are Jökulsárlón glacier lagoon, Skógafoss and Seljalandsfoss waterfalls, Dyrhólaey cliffs and many more.

    What other cars are available to rent in Iceland?

    If you decide to venture far beyond the bounds of the city and nearby towns, or plan to travel on the Ring Road during winter, you’ll need a larger SUV or 4x4 (an all-wheel drive).

    This is to be extra safe, as winter weather conditions in Iceland can make even asphalt roads hazardous. Not to mention there are some tough-to-navigate roads in rural areas, such as F-roads.

    F-roads are gravel paths that are not regularly maintained. The majority of these roads cover the Highlands: the mountainous central region of Iceland. So, if your Icelandic adventure is going to take you further afield into these less-traversed regions, a four-wheel drive is the best option for you.

    Highlands of Iceland

    In fact, renting a 4x4 is actually compulsory for driving on F-roads and dirt tracks, so there really is no other choice. Failure to do so will invalidate your insurance and could result in large fines or imprisonment; it’s important to be aware of these regulations.

    Driving tips for Iceland

    To help prepare for your fabulous road trip around Iceland, we’ve got some top driving tips for you. Road conditions in ‘The Land of Fire and Ice’ may be different from what you’re used to at home.

    With all its spectacular scenery and breathtaking views, Iceland can be a tricky place to navigate a vehicle. Make sure you’re prepared before renting your economy or city car by reading these handy tips for driving in Iceland:

    • Be aware that road surfaces can change - In Iceland, paved roads sometimes change to gravel, which is a very different texture. Therefore, it’s best to maintain a slow speed and proceed cautiously. Keep your speed low on gravel roads to avoid any loose rocks from shifting and causing damage.
    • Don’t get distracted by the beauty of Iceland! - Make sure to keep your eyes on the road. We know it sounds obvious, but it can be hard to concentrate when you’re driving past a volcanic crater that looks otherworldly. Iceland’s stunning scenery can easily draw your attention away from the window, but remember that you’ll be able to fully appreciate and enjoy the spectacular views when you reach your destination!
    Iceland landscapes
    • Check the weather forecast while traveling - In Iceland, the weather can change rapidly, so the weather forecast is your best friend. You can check the forecast before you travel and add stops along your journey if necessary, so you don’t get caught in an unexpected thunderstorm!
    • Be aware of the typical speed limits - In populated areas, the speed limit is usually 50 km/h. Speed limits are not signposted, unless other speed limits apply. If you see blue and white speed signs, they are suggesting safer speeds for certain parts of the road. In rural areas, most gravel roads have a speed limit of 80 km/h and paved roads are 90 km/h.
    • Look out for sheep! - Sheep and other livestock, such as cows are often close to rural roads and may run across them with little warning. It’s good practice to drive with caution when animals are around.
    • Take a break - In the summer, the sun is visible for most of the day (up to 22 hours in some months!). Therefore, it’s easy to lose track of time and keep driving. However, it’s important to take a break so you don’t get too tired. Make sure to keep focused and alert.
    • Don’t drive off-road - in Iceland it is strictly forbidden to drive off-road, as this could be dangerous and cause harm to plants and vegetation. Help preserve the beauty of Iceland for future generations and look after your safety by sticking to the roads.
    • Snap a photo of your car before you set off - It’s good practice to take a photo of your car when you’ve just been given the keys. This covers you in case there are some existing scratches that haven’t been spotted yet, so you’re not held liable. You could take a video of the car too if you like to further ensure you’ll stay off the hook.
    • Take out insurance - We all know it’s the sensible thing to do! Even though it’ll cost you a bit extra, be sure to protect yourself from theft and other types of damage by taking out insurance coverage when renting a city, economy or other type of car.
    • Have fun! - Now you’re fully prepared for your amazing Icelandic adventure. Enjoy and experience the magic of Iceland’s incredible landscapes and towns for yourself!

    Book the perfect rental car for your trip to Iceland here. Choose from a wide range of models that are prepared to suit wherever you go within Iceland. Buckle up and get ready for the adventure of a lifetime!


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