You need to consider three things when renting a car or choosing the best car type to rent for your road trip and vacation in Iceland. The quality of the roads leading to your chosen destinations, the time of year, and the weather. Renting a car for a road trip around Iceland is by far the most convenient and interesting way to travel in Iceland. By hiring a car, visitors taking a road trip to Iceland can choose an itinerary that fits their budget and schedule. This way, they have the flexibility and freedom required in a country with so many natural wonders to explore, photograph, experience, and admire. With a car and a driving plan, you can always take your time and easily adjust or change your route. But - there are many aspects to consider when renting a car in Iceland. It is in many ways different from hiring a car in any other country. So, I encourage you to read this article carefully before you rent a car here so that you don’t end up with the wrong car.
The type of roads in Iceland
Finding a rental car in Iceland is not as simple as hiring one in most other countries. This is primarily because some of the roads you will be traveling when you visit Iceland's natural wonders and other places of interest are gravel roads, mountain roads, or even dirt roads. Keep this in mind: Iceland has three kinds of roads: asphalt, gravel, and Highland roads (F roads). Sometimes, a place you propose to visit will require you to drive on all these types of roads, so be prepared. In short, the places that you intend to visit will kind of define what is the best car option for you.
A small rental car type is ideal for most roads during the summer
For most of the main asphalt roads, a small 2WD car is a good option. It is the cheapest way to drive around Iceland in a car. A small car like the VW Polo or VW Golf, Toyota Yaris, Kia Rio, or Suzuki Swift can accommodate four people comfortably (don't ignore the space required for the luggage you plan to carry). During summer, a small car will take you to most of the most popular and interesting places, including the natural wonders and the accommodations of your choice. A small car is also suitable on gravel roads during summer, especially if you have a front-wheel drive, which most Icelanders prefer. Many of the gravel roads are well maintained during summer. However, do bear in mind that gravel roads are more demanding and difficult to drive on, and one needs to be cautious and drive slower than on asphalt roads. In winter, you can also travel the main roads in a small car when traversing roads like the Reykjanes Peninsula drive, the Ring Road, the Snæfellsnes Peninsula drive, or the Golden Circle. From October until April, following the weather forecast and road conditions is vital before starting your road trip, especially if you are in a small car. A midsized car is a better choice to maximize comfort, especially during winter and is highly recommended for most places and most drives.
Time of year
Driving in Iceland during winter and in summer is totally different. For most people living in warmer countries, it is difficult to understand the difference and the fact that Icelanders change tires on their cars in autumn and spring. I know the difference personally because I lived in southern California for six years. Icelanders have “winter tires” and “summer tires.” The reason is the difference in driving conditions. If you have no winter driving experience, you should consider a private tour with an experienced guide. It can also be extremely difficult to drive a car in winter and late autumn for people who are only familiar with clean, dry asphalt roads in dry and sunny weather. If you want to drive across Iceland in winter/autumn conditions, I strongly recommend a 4WD car or a front-wheel drive car.
A larger vehicle type is better outside the main roads and during winter
If you decide to travel to places away from the main roads, you are much better off hiring a midsize car, preferably an SUV or a 4WD car like VW Tiguan, Toyota Raf, Dacia Duster, or Suzuki Vitara. This applies to people interested in taking loops and exploring places off the main highways, such as Mjóifjörður, Látrabjarg in the West Fjords, Rauðisandur in the West Fjords, the Vatnsnes Peninsula, or some of the waterfalls that are not near the main road, like Aldeyjarfoss. The roads outside the main roads are most often gravel roads, going over steep mountain passes, and conditions change in rain and snow. For those roads, a vehicle with more space and larger tires is much better for your comfort and security. This is very important during winter.
The weather in Iceland is unpredictable. Even though we have a very efficient Met Office in Iceland, the weather can change rapidly in a short period at your location, often contrary to the original forecast by the Met Office. Despite this small issue of inaccuracy, when you are traveling in Iceland, the best option for weather is the website of the Icelandic Met Office. It is not uncommon that visitors plan to visit a specific place or area when planning a trip to Iceland, but when you are on your way or arrive, the conditions are not particularly inviting. This applies to all seasons, but most definitely in winter. This means that sometimes you need to spend more time inside your car than you planned when you set out. In summer, most of the time, the wind limits your options rather than the rain.
A 4WD or 4X4 type is mandatory for the Highland roads in Iceland
A small car type will not get you to the Highland if you choose to travel to this exotic part of the country. The Highland requires a 4X4 vehicle, but keep in mind that the Highland is only open from the beginning of July until the middle of September. Most of the roads in the Icelandic Highland are challenging and rough gravel roads, often with many rivers to cross. No one should enter Highland Road in a small car, a midsize car, or a car that doesn't have four-wheel drive and low gear. It is simply too dangerous and irresponsible and can severely damage the vehicle and even ruin it if stuck in a river; this can lead to a cost far exceeding the total expenditure on a trip to Iceland for the whole family. If water is sucked into the air intake of a car, the engine is ruined, not to mention the panic and the consequences of being stuck in a small car in the middle of a strong stream or a river. Tourists visiting Iceland have lost their lives in such circumstances, with the last incident being in September 2018 when a young woman drowned in a river in Þórsmörk. Keep that in mind when you select a car for the Highland.
No rental car company or insurance company in Iceland covers a drive crossing a river. It can also be dangerous as a 2WD and a small 4WD, or even a midsize 4WD car with no low gear, can easily become stuck on a difficult road in the Highland. Few Icelanders would ever take such a risk, given their knowledge of the Highland. They are only too conscious of the danger to the passengers, who are often children and family members. But for the Highland roads, even a 4X4 is not always enough. A large, well-equipped, and even modified 4X4 vehicle is required for many rugged roads and tracks in the Highland. For these roads, a Toyota Land Cruiser, Jeep Wrangler, Toyota Hilux, Land Rover, or a similar vehicle is highly recommended for your convenience and security. Please don’t underestimate this premise.
Keep this list in mind when traveling in a rented car in Iceland
There are three kinds of roads: asphalt, gravel, and mountain roads (F)
Iceland is a small island, and the distance between places is usually short
Almost all of the roads are narrow, two-way roads. THERE ARE NO FREEWAYS IN ICELAND
Reduce speed considerably when driving over a one-lane bridge (there are many such bridges everywhere)
Don't stop on a road shoulder or in the middle of the road to take photos!
The speed limit is 90 KM/hr on main asphalt roads around the island
The speed limit in Reykjavík and the towns is 50KM/hr
The speed limit in residential areas in Reykjavík and in all towns and villages is 30KM/hr
The restrictions on alcohol consumption for drivers are at 0.5 promille, like in most other European countries
4X4 cars are both safer and easier to drive in the Highland and during winter
There are plenty of gas and charging stations around the country in all towns and villages
A large 4X4 is required on Highland roads, the F roads
Always check road conditions on The Road and Coastal Administration webpage, especially during winter
Cellular phone connections are good on most roads and around the country
Never try to cross rivers in a small 4X4 car or without understanding the river
There are towns and villages almost everywhere around the coastline on the Ring Road, and you are never far away from help if needed
Watch out for sheep on the roads (especially in spring and early summer)
Pick up your rented car at the international airport in Keflavík
Fuel prices are more or less the same around the country, and fuel is always expensive
Emergency help is available almost everywhere in Iceland
Check Safetravel all the time and every day for anything unusual during your tour to remain updated regarding the conditions in Iceland.
When conditions are adverse (snow, snowdrift, slippery, bad visibility), don't hesitate to drive slower at a comfort level where you feel in control. In a situation like that, remember to slow down and give the right indicator light (blinker) when it is secure for the cars behind you to pass. Avoid holding up the traffic, as other drivers, especially local folks, might understand the conditions differently and better.
Iceland is a small country and a small island
Iceland is a small island with one International Airport. Keflavik Airport (KEF) in the city of Keflavik is the place where almost all visitors arrive. It is the best place to pick up your rental car, and most rent-a-car companies deliver their cars at Keflavik airport. There are many rent a car company in Iceland, and the airport is a good place to find the type of car that is ideal for your tour. If you want to have everything ready when you arrive, you should rent a car online. This site lets you quickly compare prices for a number of rent-a-car firms and find an excellent price for a rented car that fits your tour and the season when you plan to visit Iceland. The site lists both international and local firms and saves you a lot of time on an internet search. In the process, you can add accessories you may need, like a child seat, navigation tools, or an additional driver.