Renting a Car and Driving in Iceland

I can officially say Iceland is the most beautiful country that I’ve had the privilege to visit. The way the scenery and geology can so drastically change from one mile to the next is breathtaking. I can’t even say that it was like being in a painting (which is how Switzerland feels!) because there aren’t paintings I know of with this type of terrain. It is simply incredible. You, too, may find yourself making inexplicable noises along your drive because you have no other way to express the beauty you’re continuously witnessing.

Car Rental Info and Prices

This was my first time in Iceland, so I tried to read up on it as much as I could, so I could know what to expect. I wanted freedom to get from one place to the next at our own pace. I knew that I wanted to rent a car, so that was a bit of a struggle finding the best way to go about that! I ended up booking through Holiday Autos. I was able to search a range of things specific to me (automatic transmission, unlimited mileage, etc.) and Holiday Autos does the hard work, comparing prices for different companies. I picked up/dropped off at the airport (which was also a filtered choice) with Payless Car Rentals (Payless, Avis, Budget), and it was an incredibly smooth process, and a good experience.

When renting a car in Iceland, do take note if they hold a large deposit on your card for the duration of the rental. I believe they held around $2,500 USD on mine, and this was lower than some of the others, too. So make sure you have a card with the limits needed, when booking a car rental in Iceland.
They’re also going to want to sell you extra insurance on the car. If you have a credit card you can book with that offers rental insurance, you can look into that. You can also see if your standard car insurance protects international rentals. If not, I would highly recommend getting full protection. I know it can be tempting to skimp on some of it, but Iceland is quite different from most other countries and there are a lot of unpaved roads, as well as things like, oh, you know, active volcanoes. The wind is extraordinary, too. Having full coverage gave me the peace of mind I needed, and allowed that full deposit they held to go back onto my card after dropping off. For an idea of what it might cost you, adding the Super Collision Damage Waiver and Wind and Gravel protection, for 9 days total, added $150.84 USD to my total. We also added an extra driver for the duration of the rental, which cost $39.58 USD.

The total of your rental is going to vary greatly, depending on the time you go, the style of vehicle you choose, and the time you book. I went in September, which is considered off season, so everything was slightly cheaper for me. I booked 5 months in advance and before booking, I checked Holiday Autos (in a private/incognito browser) every day for about a week and a half before finding a significantly lower price than what I’d been seeing. I booked a free cancellation deal in case I found something cheaper. But I should’ve known I got lucky with the price I did and didn’t find anything lower. Our car rental for 9 days with basic coverage was $524.38. With the added extras of the CDW and extra driver, $714.80. This was split between two of us, so I only ended up paying $357.40, 9 days, full insurance coverage, automatic transmission, unlimited mileage.

Because we had our own set of wheels, we could pull off when something interested us, and we were able to meet these adorable horses!

If you’re going to be covering a lot of ground, make sure you specifically select an unlimited mileage rental, or you could end up paying a lot of money in overage fees. Also keep in mind that automatic transmissions are more expensive, so if you can drive manual, you’ll most likely save money there. I can kind of drive manual and a foreign country wasn’t the place to perfect my skills, so I knew I needed automatic.

I would also recommend taking the route I did and try to book a free cancellation deal, in case you do find a cheaper deal you want to take advantage of, after booking. After all was said and done, I can recommend going through Holiday Autos and also let y’all know that if you see a good deal through Payless Car Rentals at the Keflavik airport, I had a good experience with them. Their counter was easy to find, sales rep was easy to work with, and drop off was a breeze.

As with any rental, make sure you take photos/record video of your rental before driving away in it. We didn’t have a sales rep take us out to the car. We were given the key and shown where to walk to, to pick it up. There weren’t any employees in the lot, so we made sure to photo document anything we noticed that wasn’t already disclosed to us. We were able to send that to a specified email, and after dropping off, no extra charges were incurred for damages. It all was really easy and I’d definitely use them again in the future.

We were able to make the extra drive out to the charming Seydisfjardarkirkja.

My rental did not have cruise control or Bluetooth, which are both pretty standard in American rentals, that’s something to keep in mind, especially if your phone doesn’t have a headphone jack, so you can’t utilize an Aux cord 😬

Now onto some tips and things to note when driving in Iceland:

Getting Gas

You’ll want to make sure your credit or debit card has a 4 digit pin for gas pumps. Most credit cards don’t have a pin, but there are options to set one up. In that case, the majority of credit cards require you to call and request one, and it is sent in the mail. You can change it to what you prefer once you receive the mailing and call to set that up. Definitely keep in mind that it could take a standard 7-15 business days to receive that pin request, so give it time to get to you before you leave on your trip. Green gas pumps are unleaded fuel, black gas pumps are diesel fuel. If you’re from America, it’s opposite for us, definitely keep that in mind!
I found that there were more gas stations along the way than I anticipated. Though I was in a 2WD car, so I did get better gas mileage than if I would’ve been in something like a Jeep or camper van. Still, if you’re at half a tank and you see a petrol station, it’s in your best interest to pull in and top off your tank. If you’re not going through remote areas, you may not even have to worry about that. But if you’re doing something like driving the ring road, then you’ll want to make sure you’re mindful of your fuel tank, and fill up when you get the chance. Google Maps also allows you to put in your route and show fuel stations along the way, so that is helpful as well.
Keep in mind that every gas pump I stopped at had an option for English. Some of the smaller towns had only two pumps at the station. And although there were two pumps, there was only one machine to put your card in and pay. In those cases, take a look on the side of your pump, it should be numbered. The machine will ask for your pump number. After inputting that, it will authorize your pump for gasoline.

Speed Limit

Speed limits are quite slower than what I’m used to. 90kph was the standard, open road, highway speed. That’s only 56mph and I’m from Utah, where stretches of I-15 are 80mph/128kph. It definitely felt quite slow and apparently the Icelanders feel this way as well because every time we hit the road, loads of cars would pass us at the first chance they got.

After getting the feel of driving there, I did my fair share of passing, too. Make sure you’re only passing when there are dotted lines indicating that it’s allowed. If there are no types of lines on the road you’re on, then be sure you’re not on a hill or curve, and you can see plenty ahead to make certain there’s no oncoming traffic.

There are no cops with speed guns here. That’s common in America, driving down the highway or interstate and you see a cop pulled off to the side of the road, just waiting for that unsuspecting speeder. That doesn’t really happen in Iceland. Instead, they have occasional speed cameras around the country. These speed cameras area always clearly marked, a blue or white sign indicating that one is coming up. When you pass it, it’s easily recognizable that you just went passed the speed camera. In fact, google maps even told us when these were coming up. They’re not hiding it, they’re not trying to catch you unsuspecting. I believe their goal is simply road safety.

Speed Camera on the roadside, via Google Maps.

If you don’t heed to the speed camera warnings, and you are in fact speeding, then you will get a speeding ticket mailed to you. If you’re renting a car, they send it to the registered rental agency, and if it shows you had the vehicle that day, the ticket gets sent to you. Speeding tickets start around $230 USD/30,000 ISK and can go even higher than $1,100 USD/150,000 ISK, depending on the type of speeding violation. Always be smart about driving. Go the speed limits, pay attention to the road signs, take note of the speed cameras, and watch for sheep crossing!

But really, watch for sheep crossing. The only time we needed to slow down for animals on our trip were to be mindful of the sheep. Most of the time they’d take off running when we got close (so cute!) and luckily they’d run in the opposite direction. But you never know when one might run out in front of you, so definitely be cautious when driving passed free roaming sheep.

Gravel Roads, Designated Roads and Pull Offs

On those gravel roads, make sure you’re not driving too close to the person in front of you. Rocks will definitely flip and could quickly land you with a cracked windshield. Luckily for us, the majority of times we were on a dirt road, nobody was in front of us. You’ll hear rocks flipping up in the undercarriage, and you might occasionally have one flip, bounce, and hit the exterior of the vehicle (hello, gravel protection), but if nobody is in front of you, you’re pretty much set on a gravel road. If you’re passing someone on a gravel road, do what you can to give that extra space between you before getting back over. If you’re being passed, I would advise slowing down and back off further, in case they don’t give you that same courtesy.

I know Iceland is pretty, god do I know it’s pretty, but don’t stop in the middle of the road to take a photo. There are a lot of pull offs along the way that you can safely park on for a quick photo snap. There were a couple of instances that we were impacted by somebody stopping in the road, or slowing down to nearly a stop, for a photo op, taking in the scenery, or perhaps trying to find out where they were. This is incredibly dangerous and puts yourself in harm, as well as anybody else who happen to be using that road. There is no good reason to stop in the middle of the road, unless your vehicle dies on you there.
Utilize those occasional pull outs and be sure you’re not driving on undesignated roads. You can actually get hefty fines for that. And to be fair, it’s easy to see if there’s a road, or accommodation for a vehicle to pull off. It’s obvious enough that you don’t have to second guess it. So if you’re second guessing, then it’s probably not meant for a vehicle.

F Roads

F Roads are only meant for 4 Wheel Drive vehicles. If you didn’t rent a 4WD, then make sure you aren’t taking F roads. These roads should be clearly marked, so you don’t have to memorize a list of roads beforehand. If there’s a sign at the turn off, marking it an F road, only take it if you’re in a 4WD. I only saw one of these roads on my trip, but that’s because I didn’t rent a 4WD, so I was staying out of any highlands.

Via Wikipedia

Some of the road numbers may simply have an “F” in front of the number, others have a sign that shows a 4×4, or 4×4 only. Clicking on the road sign photos throughout this post will link you to a Wikipedia page with Iceland road signs, you should definitely try to familiarize yourself with the important ones!


Another thing I never read about were Iceland stoplights. This may not be different in some countries, but it’s definitely different in America. Stoplights change from green to yellow to red to yellow to green. Yes, before they turn green, they turn yellow again. If you’re at a red light and it turns yellow, that means get ready to go, because it’s about to turn green.
Apparently it’s also illegal to turn right on a red light (which varies from place to place in the world) unless it’s specifically marked that you can. At least that’s what I read. But I can’t tell you how many cars I saw turning right on a red, so I’m still a bit confused with that one. I played it safe and followed the not turning right on red and nobody honked at me on any occasion.
Anyway, I think my favorite thing about stoplights in Iceland, are the stoplights in Akureyri. Look how cute they are!


Also remember that if there are two lanes in a roundabout, the inner lane has the right of way to exit the roundabout. This can seem a bit confusing at first, but you’ll get the hang of it. If you plan to exit the roundabout at the first exit, you’re good to stay in the outside lane. If you’re planning on exiting the furthest roundabout exit, you might want to enter the inner lane, that way you don’t have to watch for those who might need to exit before you. And if you are in the outer lane, make sure you’re watching for those in the inner lane that need to exit. Blinkers, of course, are very helpful in these situations, especially if you’re in the inner lane and need to exit. How will anyone in the outside lane know to give you right-of-way from the inside, if you don’t use your blinker?

One Lane Bridges!?

The idea of a one lane bridge was terrifying to me. …Until I actually drove on a couple. Believe me, you, when I approached the first few, I’d almost start sweating 😅

But then I realized that the majority of them, there were no oncoming vehicles, so all I did was slow down to make sure the coast was clear, then cruise over the bridge. Now the instances that there were oncoming vehicles, it was quite easy as well. If that car reaches the bridge first, you wait on your side of the bridge until the cars have come through, then you go. If you reach the bridge first, the other side will wait for you. If you reach around the same time, feel free to flash your lights to let them know they can go first. So if somebody flashes their lights at you, then you’re good to go first.

There are signs that let you know when a one lane bridge is coming up, and there is plenty of room for you to stop before the bridge, giving the other person the chance to pass through safely, if they are the first one to cross. There is a speed limit decrease when these appear, as well, so be mindful of that.
If you are behind somebody and they start crossing and you do, too, and a car comes on the opposite side, it’s alright that you crossed with the first car since you were still there first. But if you’re finding there are several cars lined up on each side, you may see they all start doing a one car pass, every other side each time. Then you’ll come up on some where three or so cars go at once, even though there’s a line on the other side. I always tried to be mindful of one car at a time when there’s a line, but the good news is, you don’t have many instances where there are a lot of people trying to get over the same bridge. At least in September you don’t!

Closing Thoughts

The freedom of driving yourself around is incredible. You get to make the call on where you go and when. If you see something that looks cool, you have the ability to stop and check it out. If you’re hungry and want to make a PB&J, you can pull off at a marked picnic spot and stretch your legs, eating a sandwich (we did that once and it was really cool, almost creepy, where we stopped. Maybe I’ll make a post about the weirdness one day!).

If you’re chasing the Northern Lights, sometimes you have to be able to get away from the city to see them, and if you don’t have a car that you can hop into at any moment and take a drive, there’s a chance you might miss them!

If you’ll be staying in Reykjavik, you may not need to rent a car. You can use the bus in the city, and sign up for day tours that will handle transportation. But if you plan to venture further out from Reykjavik, having a car rental really is a must. No matter what route you decide to take in Iceland, you’ll be met with the most breathtaking beauty all along the way and I am quite confident in saying you won’t regret it.

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