If you’re planning a trip to Iceland, you’ve probably asked yourself the most frequently ask question any potential Iceland traveler asks themself: is renting a car in Iceland actually worth it, or should you rely on tours and public transport instead?
Well, you are in the right place to help yourself answer that question. Being a passionate solo traveler, and also the wife of a tour guide, I have extensive experience with both. This post is going to break down the pros and cons of renting a car in Iceland, but I will give you my short answer first. The short answer is yes – for most travelers, renting a car in Iceland is worth it. But it isn’t the right choice for everyone.
In this guide, I’ll walk you through the real pros and cons, actual costs, and when renting a car makes sense — and when it doesn’t — so you can decide what’s best for your trip.
Short Answer: Is Renting a Car in Iceland Worth It?
Yes, renting a car in Iceland is totally worth it if you want flexibility, access to far more places, and control over your schedule/sightseeing in Iceland.
However, if you’re visiting for a very short stay, only plan to stay in Reykjavík, or feel uncomfortable driving in unfamiliar conditions, guided tours or public transportation may be a better option.
The value of renting a car depends on how you want to experience Iceland.
When Renting a Car in Iceland Is Worth It
You want freedom and flexibility
Iceland’s landscapes are spread out, and many of the most quiet & remote places are not easily reached by tour buses. Having your own car allows you to:
- Travel without fixed schedules
- Spend more time at places you enjoy
- Adjust plans based on weather
- Explore deeper into remote & less touristy areas (the highlands, F-roads, remote fjords)
- See more sights in the same amount of time than what you would see with a tour bus.
This level of flexibility is one of the main reasons travelers choose to rent a car in Iceland.
You want to visit more than Reykjavík
While Reykjavík is easy to explore without a car, most of Iceland’s famous landscapes and major sights are outside the city. Waterfalls, black sand beaches, glaciers, ice caves and epic hikes have to be reached by transportation.
If you plan to visit for at least 4-5 days, renting a car is usually the most practical choice. There are tour buses that do single, or multi-day tours to explore outside of the city, but they will cost you much more (more on that below)
You are traveling with more than one person
Once you are traveling with two or more people, renting a car is often more affordable than booking multiple guided tours.
Tours typically cost between $100 and $250 per person per day. A rental car, even after adding fuel and insurance, can be cheaper for couples or families. If you have young kids, you most definitely want to rent a car for flexibility purposes.
You want to travel at your own pace
Tours operate on fixed schedules. With a rental car, you can:
- Start your day earlier or later
- Avoid peak crowds
- Find remote areas with less crowds
- Stay longer at quieter locations
- Skip stops that do not interest you
- Take lengthy hikes (if you like hiking in Iceland)
For independent travelers, this is a major advantage.
When Renting a Car in Iceland May Not Be Worth It
You are only staying in Reykjavík
If your trip is short (2-3 days) and you plan to stay mainly in Reykjavík, you can:
- Walk around the city
- Use public buses
- Book one or two guided day tours
- Order a taxi (if desperate)
In this case, renting a car may not be necessary.
You are visiting in winter and feel nervous about driving
Winter driving in Iceland is definitely no joke. We typically have the most unpredictable weather between Dec-March and driving conditions be challenging due to snow, ice, wind, and limited daylight hours.
Roads are well maintained and rental cars come with winter tires, but if you are worried about driving from the get-go, it may not be the route for you (no pun intended!). If the potential for getting caught in a storm and not knowing how to navigate causes you stress, guided tours may be a better option.
You do not enjoy driving abroad
Driving in Iceland is generally straightforward, but if you dislike driving in unfamiliar countries, or don’t want to constantly have to plug and play navigation/parking centers, renting a car may make your trip more stressful rather than more enjoyable.
How Much Does It Cost to Rent a Car in Iceland?
Rental prices vary by season, vehicle type, and demand.
Average daily rental costs
- Summer (June to August): $80 to $150 per day
- Shoulder seasons: $60 to $100 per day
- Winter: $50 to $90 per day
Small economy cars are cheaper, while 4×4 vehicles cost more.
Fuel costs
Gasoline in Iceland is expensive. Expect to pay:
- Around $8 to $10 per gallon
- Roughly $250-400 for typical 8-day ring road trip (of course, it varies per car)
Insurance
Insurance works differently in Iceland than in many other countries. Gravel damage, wind damage, and sand damage are common.
Most travelers choose:
- Gravel protection
- Sand and ash protection
- Full liability coverage options
Insurance increases the daily price but helps prevent large unexpected costs. ALWAYS GET INSURANCE. Please just trust me on this one. Iceland is the most unpredictable country you can drive in.
Parking and extras
- Most tourist sites have parking fees around $8-$12
- Reykjavík has paid street parking – it’s not terribly expensive, but can add up. (P.S. – most hotels do not have parking garage options, so keep that in mind)
- Extras such as Wi-Fi or GPS may cost more
For the easiest car rental option, I personally recommend using Blue Car Rental in Iceland. They have competitive rates a seamless check-in process, and excellent roadside assistance.
Renting a Car vs Taking Tours in Iceland
Renting a car
- More freedom and flexibility
- Often cheaper for groups
- Requires planning and driving
- Best for independent travelers
Guided tours
- No driving required
- More peace of mind with the road/weather
- Less flexibility
- Fixed schedules
- Higher cost over several days
There is no single correct option. It depends on your comfort level and travel style.
My Honest Recommendation
If you want to see more than just Reykjavík/general popular tourism sights and enjoy having control over your schedule, renting a car in Iceland is worth it.
For most first-time visitors staying 4 days or longer, I recommend:
- Renting a car for your trip
- Choosing a reliable local rental company
- Adding full liability insurance for peace of mind
As previously recommended, Blue Car Rental is my go-to trusted car rental company in Iceland.
If you’re planning a self-drive trip in Iceland, I also put together a free Hidden Gems Guide with some of my favorite lesser-known stops around Iceland. It’s a helpful starting point if you want to build an itinerary that goes beyond the main tourist sights.
Frequently Asked Questions
Do I need a 4×4 in Iceland?
Not always. A 4×4 is required for mountain roads (F-roads/highlands) and is helpful in winter, but it is not necessary for the Ring Road sights in the summer.
Is driving in Iceland safe?
Yes, and it’s quite simple as well. Roads are well maintained, signage is clear, and driving rules are simple. You are essentially driving in a two-lane highway for most of your trip 🙂 Weather is the main factor that affects driving conditions.
Is renting a car expensive in Iceland?
It can be, but compared to tour prices — especially for couples or families, renting a car often provides better value.
Can I rent a car directly from the airport?
Yes. Most rental companies operate directly from Keflavík International Airport, which makes pickup and drop-off easy.
Final Thoughts
So, is renting a car in Iceland worth it?
For most travelers, yes – it is one of the best ways to experience the country on your own terms. With guided tours, you might be limited in what you can see to the most touristy, notable places.
If you value flexibility, want to explore beyond Reykjavík and see more for your time, a rental car will be the best choice for you!
