is car hire expensive in iceland


As a frequent traveler, I often get asked whether car hire is expensive in Iceland. Having visited the country numerous times, I can confidently say that the cost of renting a car in Iceland can vary greatly depending on several factors. In this article, I will delve into the different aspects that contribute to the cost of car hire in Iceland and provide insight into how to make the most economical choice.

The Seasonal Impact

One of the factors that greatly influences the cost of car hire in Iceland is the time of year. During the peak tourist season, which typically runs from June to August, the demand for rental cars spikes, causing prices to soar. Conversely, in the off-peak months, such as November to March, car hire prices tend to be significantly lower. It’s essential to be mindful of the timing of your trip if you want to secure a more budget-friendly rental.

The Type of Vehicle

Another significant factor that affects the cost of car hire in Iceland is the type of vehicle you choose. The country offers a wide variety of vehicles, from compact cars to robust 4x4s, designed specifically for navigating Iceland’s rugged terrain. Naturally, the larger and more robust the vehicle, the higher the rental cost. However, opting for a smaller, more fuel-efficient car can help keep expenses down, particularly when considering the fluctuating gas prices in Iceland.

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Insurance Coverage

When renting a car in Iceland, you will likely be presented with various insurance coverage options. While adding comprehensive coverage might seem like an additional expense, it can provide peace of mind and potentially save you from hefty out-of-pocket costs in the event of unforeseen circumstances. Be sure to carefully review the insurance options provided by the car rental company and assess the level of coverage that best suits your needs and budget.

Average Rental Costs

On average, the cost of renting a car in Iceland ranges from $50 to $150 per day, depending on the factors mentioned above. It’s crucial to research and compare prices from different rental companies to find the best deal. Additionally, booking in advance can often lead to substantial savings, as last-minute rentals tend to be more expensive.


Ultimately, the cost of hiring a car in Iceland can vary widely, and numerous factors play a role in determining the expense. By carefully considering the timing of your trip, the type of vehicle you need, and insurance coverage, you can make a more cost-effective choice. It’s essential to conduct thorough research and book in advance to secure the best possible deal.


1. Do car hire prices in Iceland fluctuate throughout the year?

Yes, car hire prices in Iceland tend to be higher during the peak tourist season and lower during the off-peak months.

2. Are there any hidden costs associated with renting a car in Iceland?

While most rental companies are transparent about their pricing, it’s essential to carefully review the terms and conditions to avoid any unexpected charges.

3. Is it necessary to purchase additional insurance when renting a car in Iceland?

While it’s not mandatory, purchasing additional insurance can provide added protection and peace of mind, especially when driving in unfamiliar terrain.

4. How can I find the best car hire deal in Iceland?

Researching and comparing prices from different rental companies and booking in advance are effective ways to secure the best car hire deal in Iceland.

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5. What type of vehicle is recommended for driving in Iceland?

For most paved roads in Iceland, a standard car is suitable. However, if you plan to venture off-road or explore rugged terrains, a 4×4 vehicle is recommended for added safety and stability.