Driving in Iceland: Which car to rent

Best Cars To Rent in Iceland For Solo/Couple

Traveling alone or as a duo gives you the ultimate freedom to explore at your own pace. For this style of travel, compact economy cars are a fantastic choice. They are incredibly fuel-efficient, easy to park in urban areas like Reykjavik, and perfect for the paved paths of the Ring Road and other main roads. Here you have some recommendations.

Hyundai i10

• Type of gear: Manual or Automatic
• Number of passengers: 5
• Starting price per day: From €42 ($49) - Manual / €43 ($50) - Automatic

The Hyundai i10 is an easy-to-drive, compact city car designed for travelers trying to maximize their budget and who want, mainly, reliability. Do not let its small size fool you; the cabin maximizes its inner space efficiently to offer a comfortable seating position for front passengers. It performs really well on paved roads and city streets, thanks to its high maneuverability around narrow parking areas or tight turns

It is an ideal companion for a single explorer or a couple focusing their journey on a long road itinerary of several days around the Ring Road and day trips from the capital. Fuel economy is exceptional, allowing you to stretch your travel budget. While it has space for five adults seated, its trunk is not the biggest there is, so you can always use the rear seats to carry some of your stuff.

• Pros: Exceptional fuel economy; fantastic baseline price; effortless to park and maneuver.
• Cons: Limited cargo trunk capacity for large luggage pieces; strictly prohibited on highland F-roads.

Toyota Yaris

• Type of gear: Automatic
• Number of passengers: 5
• Starting price per day: From €45 ($53)

The Toyota Yaris is a great example of a reliable and smooth car, making it a favorite for duos. Equipped with a seamless automatic transmission, it removes the stress of gear changes if you are not used to it, allowing you to focus on the dramatic mountains and waterfalls you’ll see through your window. The cabin is designed with user-friendly controls, intuitive media connectivity, and very comfortable seats that hold up well during long driving hours.

It is slightly more elevated and robust than other basic city cars, so it can manage gravel paths, which are very common in Iceland, with ease. The Yaris has a wonderful balance between compact external dimensions and a surprisingly spacious interior, making it a prime choice for traditional holiday itineraries.

• Pros: Highly reliable mechanics; smooth automatic transmission; comfortable interior.
• Cons: Not suitable for highland F-roads; can feel lightweight in exceptionally strong wind gusts.

Kia Ceed

• Type of gear: Automatic
• Number of passengers: 5
• Starting price per day: From €48 ($56)

This is one of the most spacious choices among the compact cars in our fleet. It’s great for those couples or solo travelers looking for a bit of extra room. The Kia Ceed hatchback feels like a premium car without a big price tag. The interior is modern and comfortable. It performs really well, it’s an easy-to-drive and versatile car, very reliable.

The car has been designed with good insulation from noise and cold from the outside. The trunk is noticeably bigger than the one in smaller economy models. You can easily fit several suitcases or backpacks without needing to fold down the rear seats. It also feels bigger and more robust than other vehicles in its category.

• Pros: Big trunk for an economy hatchback; excellent cabin insulation and comfort; modern tech features.
• Cons: A bit higher baseline cost within the small car category; limited to standard paved and gravel roads.

Best Cars To Rent in Iceland For a Family

Traveling with family or as a small group (2-4 people) requires a good blend of passenger comfort, storage space, and overall safety. Midsize and family vehicles provide the necessary legroom to keep everyone happy, alongside a big cargo space to store snacks and all your belongings.

Renault Captur

• Type of gear: Automatic
• Number of passengers: 5
• Starting price per day: From €50 ($59)

The Renault Captur is a modern, stylish crossover that brings a higher ride height, great for uneven stretches of road, and a highly efficient hybrid engine. Also, the elevated seating position provides an excellent point of view. Inside, it feels high-tech and welcoming, featuring a brilliant touchscreen that connects easily to smartphones for navigation and playing your favorite playlists.

While classified as a compact SUV, it operates with front-wheel drive, ensuring optimized fuel efficiency over long journeys. The rear bench can slide forward or backward, allowing you to customize the balance between passenger legroom and rear cargo volume based on your daily needs. It is an excellent match for small families who want the look of an SUV with the economical price of a standard car.

• Pros: Elevated view of the road; impressive hybrid fuel efficiency; smart sliding rear seat design.
• Cons: Lacks 4x4 capability; restricted from entering the highland F-roads.

Kia Ceed Wagon

• Type of gear: Automatic
• Number of passengers: 5
• Starting price per day: From €55 ($64)

The Kia Ceed Wagon is the ultimate traditional road-trip champion for families who want a lot of trunk space over everything else. Significantly larger than the hatchback model, this wagon variant opens up an enormous, low-loading trunk that can fit strollers, heavy suitcases, and grocery bags simultaneously. Passengers in the back enjoy excellent headroom and wide, great for admiring the landscapes during the trip.

The vehicle sits closer to the ground than an SUV, which makes it incredibly stable, easy to drive, and with good resistance against the strong coastal winds. It provides a smooth, quiet, and deeply comfortable interior that allows children to rest easily between stops.

• Pros: Massive, easily accessible cargo trunk; predictable and stable highway handling; great rear passenger headroom.
• Cons: Low ground clearance requires caution on bumpy roads; restricted from F-roads.

Peugeot 5008

• Type of gear: Automatic
• Number of passengers: 7
• Starting price per day: From €85 ($98)

The Peugeot 5008 is a sophisticated, large family cruiser with a modern aesthetic. Designed to prioritize comfort, its modular interior features individual sliding and reclining seats in the second row, ensuring everyone can find their perfect comfort zone. It has a third row of seats that can be raised easily if you’re a larger group, or be folded down to increase the cargo space.

Up front, the futuristic dashboard keeps your maps and routes directly in your line of sight. It’s really smooth to drive, absorbing bumps really well. It is tailored perfectly for larger families who want to tour the main roads in style.

• Pros: True seven-passenger capacity with modular seating; high-tech interior; smooth highway ride.
• Cons: Higher daily rental cost; front-wheel-drive means it cannot access highland tracks.

Dacia Jogger

• Type of gear: Manual
• Number of passengers: 7
• Starting price per day: From €58 ($65)

The Dacia Jogger is a practical and clever vehicle that blends the best things of a wagon, an SUV, and a passenger van. It stands out as a great cost-effective option for families needing seven seats without breaking the bank. The interior is practical and robust, but not as refined as in other models.

When the third-row seats are not in use, the trunk space expands quite a lot, offering plenty of vertical room for stacked bags. Its honest, budget-friendly approach makes it an excellent choice for those who are looking for utility and great value.

• Pros: Highly affordable seven-seat option; durable, easy-to-clean interior; generous cargo volume.
• Cons: Manual transmission only; basic interior compared to other pricier models.

Best Cars To Rent in Iceland For F-Road/Winter Driving

If your travel dreams involve crossing unpaved mountain passes, splashing through shallow rivers, or exploring during the winter months, a strong 4x4 vehicle is mandatory. These tough machines provide necessary ground clearance, advanced traction systems, and legal authorization to travel on Iceland’s rugged F-roads. Remember that it is forbidden to drive a conventional car on F-roads. Also, remember that driving off road is illegal and can result in high fines.

Suzuki Jimny

• Type of gear: Manual or Automatic.
• Number of passengers: 2 to 4 (depending on configuration)
• Starting price per day: From €61 ($71) - Manual/ 2 passengers / €97 ($113) – Automatic/4 passengers.

The Suzuki Jimny, with its iconic design, is the perfect choice, in its cheaper version, for couples wanting to venture onto F-roads. It features a mechanical four-wheel-drive system that can deal with rocky mountain trails and steep inclines with ease. Its compact size is its greatest asset, letting you navigate narrower roads and park in tighter spaces than with a larger vehicle

The interior layout is deliberately retro and rugged, utilizing tough materials that are easy to wipe down. Because of its specialized design, it is an absolute blast to pilot through the wild highlands. However, it is optimized for that purpose, so the ride can feel stiff on smooth highways, and luggage space is a bit small unless you fold the rear seats flat.

• Pros: Phenomenal off-road capability; compact and easy to control on rough tracks; rugged aesthetic.
• Cons: Stiff highway ride quality; limited interior space for passenger comfort and large bags.

Subaru XV

• Type of gear: Automatic
• Number of passengers: 5
• Starting price per day: From €65 ($76)

The Subaru XV is the perfect combination between road comfort and mountain track capability. Subaru is known for delivering cars that perform really well under all kinds of conditions and on every type of road. The XV has exceptional grip on ice, snow, loose gravel, and wet asphalt. It has good ground clearance to deal with rocks on F-roads, but, at the same time, handles with the precision, comfort, and ease of a standard hatchback on paved streets.

The cabin is quiet, robustly constructed, and fitted with an advanced safety system that protects you throughout your journey. It is a fantastic choice for year-round travel.

• Pros: Superior, smart all-wheel-drive traction; comfortable ride; excellent active safety systems.
• Cons: Moderate trunk size compared to larger SUVs; not built for extreme deep-river crossings.

Jeep Wrangler Rubicon

• Type of gear: Automatic
• Number of passengers: 5
• Starting price per day: From €157 ($183)

The Jeep Wrangler Rubicon is built for travelers who refuse to let the terrain dictate their itinerary. With its unique design, that makes you feel you’re a real adventurer, it features really well on all terrains due to its high clearance. It moves effortlessly on volcanic plains, and its tall build makes it one of the best options for river crossings.

Inside, the cabin offers a mix of modern touchscreens and rugged, weather-resistant elements. It’s one of the priciest options, but it will allow you to go where not many people dare.

• Pros: Elite driving on rugged roads; massive ground clearance for river crossings.
• Cons: Expensive daily rental rate; high fuel consumption; not that smooth on highways.

Best Electric Cars to Rent in Iceland

For those looking for sustainable travel and reducing fuel costs, we have a couple of completely electric vehicles. The network of fast charging stations in Iceland is rapidly growing in recent years.

Nissan Ariya

• Type of gear: Automatic.
• Number of passengers: 5.
• Starting price per day: From €77 ($89).

The Nissan Ariya is a futuristic, highly polished electric crossover that perfectly defines the modern driving experience. Its interior is minimalistic, with a completely flat floor, elegant wooden details, and dual screens. On the road, its all-wheel-drive electric engine delivers great acceleration and exceptional stability over wet or icy surfaces.

It handles gravel pathways with ease, protecting the cabin from external road noise wonderfully. It comes with a high battery range, so you don't need to stop that often, and you can charge quickly at fast-charging hubs while enjoying a hot coffee at a local service station.

• Pros: Modern lounge-style interior; exceptionally quiet and smooth; great all-wheel grip.
• Cons: Even if there are many charging stations in Iceland, you’ll need to plan your stops more carefully, especially in remote regions; cargo space is average.

Tesla Model Y

• Type of gear: Automatic.
• Number of passengers: 5.
• Starting price per day: From €77 ($89).

The Tesla Model Y is a highly popular option among travelers, blending incredible efficiency with high-tech convenience. The cabin is dominated by a giant central touchscreen that manages navigation, vehicle settings, and entertainment seamlessly. Because it features dual-motor all-wheel drive, it performs well both on paved and gravel surfaces, as well as slippery wet roads.

Storage is a massive strength here; without a traditional engine, you get a massive rear trunk, under-floor compartments, and a convenient front trunk. Also, renting a Tesla gives access to the reliable Tesla Supercharger network scattered across Iceland, making charging incredibly fast and straightforward.

• Pros: Access to the rapid Supercharger network; extra cargo space with a front trunk; highly advanced navigation.
• Cons: The digital screen requires a bit of a learning curve; the minimalist cabin lacks traditional physical buttons.

Best Minivans to Rent in Iceland

When traveling with a large group of friends, an extended family, or a great deal of luggage and equipment, nothing beats the volume and shared experience of a passenger minivan.

Renault Trafic

• Type of gear: Manual and Automatic.
• Number of passengers: 9.
• Starting price per day: From €163 ($190) – Manual / €171 ($199) – Automatic.

The Renault Trafic is a highly efficient passenger van that can fit up to nine adults comfortably without feeling too crowded. The seating arrangement ensures everyone enjoys proper legroom. The cabin has large windows, filling it with natural light, offering passengers excellent panoramic views of passing volcanic fields.

Even with all nine seats occupied, the rear cargo section can fit quite a lot of luggage. It handles cleanly on the highways, driving more like a large car than a bus, which helps build driver confidence on Iceland’s peculiar roads.

• Pros: Full nine-passenger capacity; easy-to-drive; good highway fuel economy for its size.
• Cons: Front-wheel-drive configuration prevents access to F-roads; requires careful parking due to its length.

Volkswagen Caravelle

• Type of gear: Automatic.
• Number of passengers: 9.
• Starting price per day: From €239 ($279).

The Volkswagen Caravelle stands out as one of the most iconic minivans out there. It’s a great, more luxurious option for groups. It comes equipped with a highly capable all-wheel-drive system, giving this van the ability to tackle challenging winter roads and highland routes safely. The interior features high-quality German engineering, offering supportive seats, excellent climate control in the whole cabin, and great sound insulation.

It can fit massive amounts of luggage effortlessly, making it perfect for groups carrying winter wear or camping equipment. It represents a premium investment that delivers great comfort, security, and versatility for those eager to explore every corner of the island.

• Pros: All-wheel-drive capability for different road conditions; exceptional build and passenger comfort; huge luggage volume.
• Cons: High daily rental rate; significant fuel consumption when fully loaded with passengers and gear.

Travel tips

Knowing what car fits you plans better is important, but it’s not the only thing to consider when renting.

Insurance

When renting a car, insurance is one of those things you should put extra attention into. Even more in Iceland. We offer different insurance options, and you can easily find the one that fits best your needs. Take a close look at all the options, but here you have an overview.

• Know the Bundles (Silver, Gold, Platinum): Go Car Rental includes a basic Silver Insurance Package by default, which covers the standard Collision Damage Waiver (CDW), Super CDW, Theft Protection, and Gravel Protection. Upgrading to Gold or Platinum reduces your financial liability (self-risk) even further.
• The "Zero Excess" for Credit Cards: If you want to rent a car without a credit card, you can easily do so with Go Car Rental by upgrading to their Gold or Platinum zero-excess insurance packages, which allow you to use a debit card instead.
• Gravel Protection (GP): Don’t skip this. Even if you stay on the Ring Road, loose pebbles from passing cars can easily chip paint or crack a windshield.
• Sand and Ash Protection (SAAP): This is crucial if you are driving along the South Coast. Fierce Icelandic winds can pick up fine volcanic ash and sand, which can damage the car’s paint job.

Gas Station & Refueling

• The "Half-Tank" Rule: In rural areas, the Westfjords, or the Highlands, gas stations can be located more than 100 km apart. Make it a habit to fill up the tank whenever it drops to half, just in case.
• Self-service: Almost all fuel pumps in Iceland are automated and unstaffed after hours. You must have a credit or debit card with a 4-digit PIN to pump gas.
• Never Select "Fill Up" (Full Tank): When using an automated pump, selecting the "Fill Up" option places a temporary authorization hold (often up to 25,000 ISK or about $180 USD) on your card. Instead, manually choose a set amount (like 5,000 or 10,000 ISK). If you choose an amount higher than what fits in the tank, you will only be charged for what you actually pumped.
• Prepaid Fuel Cards: If your bank card doesn't have a PIN or gives you issues, stop by a N1 or Olís station on your first day and buy a prepaid gas card to use at the pumps.
• Free Car Washes: Most gas stations across the country have free, self-service cleaning stations. Icelandic roads—especially gravel ones—will make your vehicle muddy fast, so use these to keep your windows and headlights clear.

Local Driving Rules

• Headlights On, Always: It is a legal requirement in Iceland to have your headlights switched on 24/7, year-round, even in the middle of a bright summer day.
• Roundabout Right-of-Way: In two-lane roundabouts (very common around Reykjavík), the inner lane always has the right-of-way. If you are in the outer lane, you must yield to drivers exiting from the inside.
• The Golden Rule of Car Doors: Hold onto the car door with both hands whenever you open it! It might sound weird, but it’s essential in Iceland. Severe gusts of wind can easily catch a door, bending the hinges. Bear this in mind when parking your car, try to do it always facing the wind.
• Watch for Sheep: In this country, sheep roam freely. If you see a sheep on one side of the road, slow down immediately. Their behavior is unpredictable and they could try to cross the road.
• Never Stop on the Road for Photos: The Ring Road is narrow, mostly single-lane in each direction. Stopping in the middle of the road or pulling off onto the shoulders (some parts don’t even have them) to snap a photo is incredibly dangerous and illegal. Always wait for a designated area.
• Check the Road Conditions Daily: Check the IRCA website before driving to see the road status and make sure that your route is open and safe.

Conclusion

Picking the right rental car makes a big difference for a safe, comfortable, and enjoyable trip in Iceland. Whether you're traveling solo and want something small and fuel-efficient, going with family and need extra space, or heading off-road and require a proper 4x4, there's a good option for every plan and budget.

Just make sure the car fits your itinerary, get the right insurance (especially Gravel and Sand/Ash protection), and follow the local driving rules. Keep an eye on fuel stops, check road conditions daily, and drive carefully. With the right car and a bit of preparation, you'll have an amazing time exploring Iceland’s beautiful landscapes. Safe travels!

Frequently Asked Questions