Car rental in Iceland – what you need to know


Renting a car in Iceland will give you more flexibility than if you travel by public transport or on an organised tour. You’ll be able to stop when and where you want, you won’t be waiting for others and you can travel much more independently. You can create your own itinerary (and change it if circumstances dictate) and explore at your own pace.

With all that said, there are many things to be aware of when renting a car in Iceland. This guide covers a number of issues you’ll want to consider.

Plan ahead!

Aside from the blip of the pandemic which affected travel the world over, Iceland has been steadily soaring in popularity. Foreign overnight visitors more than tripled from 672,773 in 2012 to more than 2.3 million in 2018. In 2022, it’s expected to be over 1.6 million and may well significantly exceed that figure given the international interest generated by the most recent volcanic eruption in the country.

In short, demand for tourist services remains high and it pays to plan ahead, especially with something like car hire, which tends to be booked some way in advance, if you want to get your first choice of vehicle. Leave it too late and demand may mean you’ll find yourself paying a premium for an inferior car.

Driving license

Driving licenses issued in the USA, Canada, the European Economic Area (EEA), Australia and New Zealand are valid for use in Iceland. If your driving license is issued from somewhere else, then you’ll need to check that it has a license number, is printed in Latin characters (Roman alphabet), includes your photograph and has not expired.

If you are unable…

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