How to Choose a Rental Car Company in Iceland

How to Choose a Rental Car Company in Iceland

Don’t ruin your trip by making these mistakes! The “dos” and “don’ts” of renting a car in Iceland.


Congratulations, you are thinking of going to Iceland!

First of all, let me say good choice. Second of all, you seem to be thinking of renting a car instead of taking a group or hop on/hop off bus, and for this I also applaud you, because renting your own car IS THE WAY TO GO. It gives you the freedom you really should enjoy on your trip to stop (safely, at a pull off 😉 ) whenever your heart desires. With so many beautiful views, trust me, you’ll want this flexibility. Need some convincing? Pop over to my article about “Just how beautiful Iceland actually is.” (Coming soon!)

There are tons of options for rental cars and companies in Iceland, it can be overwhelming. But don’t worry, I’ve done a ton a research, tested the process out myself, and am going to break down the process for you, along with some helpful and fun tips! So here we go!

How to pick a company

The best way to pick a company is to think of your requirements, do your research/internet browsing, read blogs (well done on doing at least this step!), and compare all options.

The other best option is to just take my word for it as I did all that work already. You’re welcome. 😉

I’ll start with the caveat that vehicle options and price were my main concerns, so that is leading this suggestion. While I have faith that any rental company you choose will be great (provided you do some research), my go-to company is Cars Iceland and I’ll tell you why:

1. Vehicle Options

Cars Iceland has automatic and manual cars, small to large SUVs, vans, luxury, and 4×4 options. There is seriously something for all needs. We needed an automatic vehicle with 4×4 capability that could fit 5 people, luggage, and snacks (yes, snacks deserved their own category) and had a few options to choose from.

You can see all the options available to you on the Cars Iceland –Fleet Page to see which option you love!  

2. No last minute add-ons or secret fees

The price you see at booking is what you pay. One thing I really appreciated about renting with Cars Iceland is that I knew exactly what I was going to be paying before I even arrived in Iceland, which was really helpful in creating a budget for Iceland.

Once you select the vehicle, any insurances, and/or add-ons you may want, you confirm your reservation with a booking fee. This basically acts as a deposit and is easy to pay online with your credit card. You will then be emailed a confirmation email, with your total cost, so you know exactly what you will be paying once you arrive. 

3. Some insurance included in pricing

The gusty winds, gravel road, and general extreme weather conditions in Iceland make insurance for your rental car a must. Cars Iceland really excelled in this area by including some insurances just for renting with them, as opposed to having as add-ons, which means you save money!

They included the following with our rental automatically:

– Collision Damage Waiver (CDW)

– Super Collision Damage Waiver (SCDW)

– Gravel Protection (GP)

– Theft Protection (TP)

These inclusions may differ depending on the vehicle or special you choose, but even if the insurance you wanted isn’t included automatically, you can still add on the ones you feel comfortable with at a nominal fee prior to or at arrival. For example, once we arrived, we added on the Sand and Ash (SAAP) protection for ~$15 a day.

4. Discount card and other BONUSES

With a rental from Cars Iceland, you are given a discount card that is valid at all Olis gas stations around the country. This proved to be so valuable. Not only do you save cents on every liter and discounts on food, you get a free coffee with every visit to a station! I don’t know about you, but collectively, the five of us drink a lot of coffee.  We only paid for 2 cups the entire trip thanks to this card. You simply take it in with you to the gas station, they scan it, and let you serve yourself from a counter to the side.

PRO TIP: you can just trade off the card as you all go in, so each person can use the card and get a free coffee–that meant we got 5 free coffees every stop!

In addition to this discount card, which let me be honest, if you still need reasons to choose this company, I’m not sure what I have left to say will convince you…all these options were included automatically with our rental:

– Unlimited mileage/kilometers

– Taxes included in quoted price (24% Local VAT)


-Free cancellation

-24/7 emergency service

You can also add on these bonuses:

Extra driver

-4G WiFi

-Roof Box

-Baby Seat

Of course, not all these options may be included automatically or available for the vehicle you choose, but having the options is a definite win.

5. Flexible pickup and drop off

Cars Iceland knows you are most likely going to get in and leave early from the Keflavik airport, so they’ve made pick up and drop off easy from this location. They have an office at the airport that is open 24/7 to assist you. Even when my flight was delayed a few hours, missing our pick up window, they held our car for me and checked me in no problem when I finally arrived.

6. Good condition cars and customer service

Lastly, but definitely not leastly, the cars Cars Iceland offers are in good condition. We couldn’t have been happier with the condition of our SUV. It felt brand new, ran smoothly, was clean, smelled good, and felt like we were the first to have an adventure in it.

On top of that, had we had an issue, I know the customer service would have been top notch. We had a few questions prior to arriving and within hours of emailing them had a response from Cars Iceland’s customer service team. They were friendly, helpful, and prompt. Knowing we had friendly customer service and 24/7 emergency care at our fingertips was the icing on the cake for me in selecting them for our trip.


What about companies I have discounts with, like Thrifty and Hertz?

Those are options, and if you are someone who likes the familiar and to stick with a brand- then by all means, do your thing! My two cents would be that even with your discount, you are probably still going to pay more with these companies than if you were to go with a local company. That’s just how it works in Iceland, locally owned car rental places have a price advantage.

So, my advice would be to compare your discount vs. Cars Iceland’s specials on the exact vehicle you want and see which would work best for you!

Final tips and things to keep in mind

  1. Don’t forget to choose an Automatic vehicle if that’s what your group needs
  2. If you are American, the size of some of these vehicles may be smaller than you are used to, especially in the trunk area. We had five people and rented a seven seater SUV, which was still a bit tight compared to what we are used to, so think a size up!
  3. I would recommend to get all the insurances that correspond with areas you are going to. For example, if you will be driving in the southern part of the country where there is sand, get the sand and ash insurance. The insurance cost is minimal compared to what you would pay if something went wrong.
  4. Check to see if your rental has a built in GPS before renting one. Our SUV had a GPS built into the dashboard, but we still rented one because we didn’t know there was already one in the car. Our GPS happened to be included thanks to our special, but had it not been, it would have been frustrating to pay for one in addition to the one built into the car.
  5. Bring your passport and driver’s license to pick up the car
  6. Get a pin for your credit card to be sure stations will accept it. Some card readers in Iceland only worked if you could put in a pin (like you do with a debit card). To learn more about setting this up, take a look at my article on “How to set up a pin on your credit card before travelling”.
  7. Always keep a quarter tank of gas in your rental. Some older blogs scare you into thinking you will never see gas stations and to fill up whenever you can. While that’s not a bad strategy, it’s simply not the case anymore as there are more stations at more frequent intervals. As a happy medium, we found it worked well for us to keep a quarter tank at all times. With the constant changes in weather, deciding to go off on an unplanned path, and just unknown of the terrain, this kept us calm throughout the trip.  


So that’s it! I hope you find this information helpful. If you have any questions, found a mistake, or have any tips to add for your fellow travelers, leave a comment or message me, I would love to hear your thoughts!




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