Rental Car — The Alpha and Omega
A rental car is practically indispensable in Iceland. There is no railway network, bus service is limited and expensive, and the highlights are scattered across the island. The Ring Road (Route 1) is in good condition and fully paved.
Which Vehicle?
| Type | Price/Day | Suitable for |
|---|---|---|
| Small car (2WD) | 50–80€ | Ring Road in summer, Golden Circle |
| Compact SUV (2WD) | 70–120€ | Ring Road + gravel roads |
| All-wheel SUV (4x4) | 120–250€ | F-roads, highlands, winter |
| Campervan | 120–200€ | Ring Road + camping (saves accommodation!) |
Important Driving Rules
- F-roads (highland tracks): Only allowed with 4x4! Driving on F-roads with 2WD voids insurance coverage and risks hefty fines
- Fording: Crossing rivers without a bridge. Only with 4x4 and experience! When in doubt: DO NOT cross. Rental cars regularly drown
- Off-road ban: Driving off marked paths is strictly prohibited and carries high fines. The sensitive vegetation takes decades to recover
- Speed limit: 50 km/h in towns, 80 km/h on gravel roads, 90 km/h on asphalt roads. Speed cameras everywhere!
- Wind: The greatest enemy in Iceland. Car doors can be torn off in storms — always open against the wind and hold tight!
- Sheep: From June to September, free-roaming sheep are on and beside the road. Drive slowly!
Insurance
Highly recommended:
- CDW (Collision Damage Waiver): Basic protection, often included
- SCDW (Super CDW): Reduces the deductible to 0
- Sand & Ash Protection (SAAP): Iceland's specialty! Volcanic sand can destroy the paint
- Gravel Protection (GP): Gravel damage from oncoming traffic on gravel roads
Achtung
NEVER drive on F-roads with a 2WD vehicle! You immediately lose all insurance coverage, and towing costs from the highlands can amount to 2,000–5,000€. Also: DO NOT ford rivers without experience. Every year, dozens of rental cars get stuck in Icelandic rivers — or are washed away.
