DrivingRental CarsWhat Does a Car Rental Agreement Look Like in Iceland?
Tourists reading Iceland car rental agreement before their trip
Go Car Rental Iceland travel writer Leah BIlquist
By Leah BIlquistDec 7, 2023 • 17 min read

What Does a Car Rental Agreement Look Like in Iceland?

Renting a car should be a stress-free experience when starting your Iceland vacation. But we understand there are a lot of documents and questions when renting a vehicle. You may notice a hefty document either being handed or emailed to you when you pick up your rental car. This document contains all of the information about your Iceland car rental. It will also outline important terms and conditions.

We are going to break down what your car rental agreement includes. That way you can pick up your rental car with more confidence and less worry!

What is a Car Rental Agreement?

A rental car agreement is your guide to your entire rental. It will include essential details, such as information about the car, insurance options and so much more. It is important to fully review the vehicle rental agreement, even if it can seem overwhelming.

A woman reading a car rental agreement paper in a rental car in Iceland

What is in a Car Rental Agreement?

The car rental agreement will include critical information and lengthy fine print. We are going to give you the easy version of everything in the agreement.

Rental Agreement Number

Located at the top of the document will be your Rental Agreement Number. It basically is your confirmation number for your car rental.

This is important to have in case you need to contact the rental car location for any reason. Always have your number handy when calling the rental car company with any questions about your rental.

Rental Location

Sometimes it's easy to mentally check out during your road trip through Iceland’s majestic landscapes. You may be so relaxed that you forget where you picked up your car a few weeks ago.

Don’t worry though, your rental location will always be listed on the rental agreement. Just plug it into your GPS and make your way back to the rental car center.

A common question we get is:

What happens if you return a rental car to the wrong location?

If this does happen, talk to your rental car specialist. There could be a fee to transport the car back to the right location.

Vehicle Information

This will include the type of vehicle you are renting, the brand, and the year of the car. This is a good reference for you to have to ensure your car matches what is on the document. This information should list if the car is a 2WD or 4WD vehicle too.

Rental Rate

The rental rate section is one of the most important parts of your rental agreement. This will detail the Iceland car rental price. You will see two sections, Total Price and Total Paid.

If you paid in advance, your price will be under Total Paid. Sometimes a portion is paid to reserve and the remainder is paid when you return the vehicle. This will depend on your reservation type.

If you booked an Iceland car rental deal, you may have money off in the discount section of your agreement.

We know how important finding a cheap car rental in Iceland can be. Go Car Rental runs various promotions throughout the year, so it's always best to check the website prior to booking.

Rental Dates & Times

Always review your rental dates and times before leaving the rental car center.  This will detail exactly what day you picked up your car and when you need to return it.

While the day may be simple to remember, the times are the most significant part. You want to make sure that you return the car at the listed time to avoid any late fees.

Driver's Information:

Make sure all of the driver’s information is correct on the car rental agreement. This is vital in case something happens. If you, unfortunately, receive a parking ticket or unpaid toll ticket, it will go to the driver on file.

If this information is wrong it could take longer for you to be contacted, resulting in additional fines. Nobody wants that souvenir on vacation!

Fuel Policy

Every country is different with car rentals, so understanding the fuel policy is a must. You will either have the option to prepay for fuel or bring the tank back filled up.

Iceland car rental companies require that you refill the tank before returning. That way the next renter can easily pick up the vehicle after it’s cleaned.

Gray rental car refueling at a gas station in Iceland.

If you do not bring the tank back full, there is a 35€ or $37 fuel charge that will be added to your reservation. This is in addition to the tank of gas you will pay for.

You can also prepay for fuel at Go Car Rental and many choose to do that. That way you do not have to worry about finding a gas station and filling prior to return.

Your rental car specialist will also go over this with you at the pickup counter. In addition to it being listed in the rental agreement.

Mileage Limits

Most rental car companies will charge you if you go over a certain amount of Mileage. This means that you might have to cut your road trip short.

A detailed shot of the dashboard inside a rental car amidst the scenic beauty of Iceland.

We want you to have the road trip of a lifetime at Go Car Rental so you won’t find mileage limits listed on the agreement! Our insurance plans have unlimited mileage so that you can cross all of Iceland’s attractions off your list.

The Fine Print

Located at the bottom of the rental agreement will be the fine print. This is a lengthy paragraph that details what you are responsible for. Most travelers skim over this because it is a lot of information.

If you violate any of the rules in the fine print, you will be liable. We recommend taking a few minutes to read the fine print. That way you can be fully aware of what you are signing.

Your Signature

All the way at the bottom of your agreement is a line for your signature. The best advice we can give is to review everything before signing. Make sure you are fully comfortable with the rules of the rental and ask if you have any questions.

Our team at Go Car Rental is trained to handle all of your questions. We want you to enjoy your trip through Iceland, hassle-free!

Your Rental Agreement and Insurance

Now that you understand what the sections are in your rental agreement, we will talk about Insurance. The Insurance you purchase will also be listed on the agreement, and we offer a variety of them.

Our main insurance coverage options are Plus+, Premium, and Premium Plus+. Premium Plus+.

Insurance can relax your mind when renting a car in Iceland, but there are so many different kinds and add ons. Here is a full list!

Excess Liability Insurance

Excess insurance covers claims that exceed the limits of a primary insurance policy. Excess Liability is included in each plan but with different circumstances. For Plus+ it would be 875€, Premium is 0€ and Premium Plus+ is 0€.

Collision Damage Waiver

The Collision Damage Waiver will cover collision damages that occur to the body of the vehicle and injuries of the driver and passengers. It covers a majority of emergencies as well as hospital stays and even medical checkups.

While many of us like to think of a situation like this cannot happen, it can. This is why SCDW is included in all of our Insurance plans with Go Car Rental, just another perk of renting with us!

Theft Protection

Iceland is one of the safest countries in the world but that doesn’t mean you should skip out on theft protection. Theft protection, also known as TP, covers theft of the rented vehicle. Fortunately, this is included in all of our insurance plans when renting with Go Car Rental, and there is a 0 ISK deductible too!

Gravel Protection

Gravel Protection is an insurance that covers damages from gravel to your rental car. This can include the body of the car, the headlights, and even the front windshield. Gravel Protection can be an important add-on when driving in Iceland.

The roads in Iceland have a layer of asphalt that is rougher than normal roads. The country does this to provide a steadier grip on the roads when winter hits.

The gravel rock can help prevent the roads from turning into a sheet of ice. This is why paved roads tend to be more slippery and prone to car accidents when covered in snow and ice.

We include Gravel Protection in all of our insurance plans so you can stress less and drive more.

Sand and Ash Protection

SAAP is Sand and Ash Protection, and it covers just that. Sand or ash can cause a major mess to a vehicle, sometimes requiring a whole new paint job. At this rate, getting a new car can sometimes be cheaper than paying to fix it. Iceland is known for its crazy weather which is why adding on SAAP is so important.

It is recommended any time of the year but especially when the snow begins to melt, which causes the sand underneath to go from muddy to dry and loose.

SAAP is included in our Premium Plus+ plan. It can be added to other plans for an additional cost.


Your insurance is valid when driving F-Roads, except for crossing rivers. There is no insurance that covers this. You also must have the proper vehicle to drive on F-Roads, which is a 4X4 or 4WD vehicle.

A 2wd rental car is not allowed to go on F-roads and therefore, you are not insured while driving on F-roads and you will be liable for fines and costs of repairing any damage to the chassis of the rental car.

Tire Insurance

Tire Protection will only cover the damage to the tire or the cost of a tire repair. It will not cover the service to change the tire or a tow cost. If a flat tire does occur, the renter is responsible for getting the vehicle to the tire shop to have the tire fixed. Tire Insurance is included in our Premium Plus+ Insurance Plan.

Go Car Rental does provide complimentary studded winter tires during winter, which run from November to April.

Towing Cost

Towing costs can be expensive, but we get it, things happen! Your deductible for towing will depend on which Insurance plan you are on. For Plus+ your towing cost deductible would be 3.000 €, Premium is 2.000 € and Premium Plus is 250€.

After-Hours Pickup

Some flights arrive late or really early in the morning. The last thing you want to do is hang out at the airport when you could be getting your road trip underway.

That is why we offer After Hours Pickup for two of our insurance plans, Premium and Premium Plus+. If you plan on picking up outside of our business hours, these insurance plans would be ideal for you!

Extra Driver

One of our favorite Iceland car rental tips is to add an extra driver to your reservation. Being the only one driving on a road trip can be a lot of pressure. The most pleasing way to enjoy the views, while keeping your energy high, is to switch out drivers throughout your trip.

You can do this by adding an extra driver to your rental car reservation. This does come at an additional cost unless you have the Premium Plus + insurance plan, which includes one free extra driver.

Your Rental Agreement & Extras

The cost of extras will be listed on your rental agreement. You can rent one or all or of the options below.


If you are looking for WIFI and great coverage you should consider the Premium Plus + insurance! Free Car WIFI is included in your insurance cost, which means you can use Google Maps to search for hotels nearby.

Close-up image of a woman in a rental car in Iceland, using her cell phone with a GPS navigation app on screen.

Enjoy less stress with the convenience of this perk. If you are purchasing a different plan, you can add on Car Wifi for an additional cost.


GPS is great for those exploring the country. While popular routes such as Ring Road and Golden Circle are pretty straightforward, GPS can be beneficial. There are a lot of off-the-beaten-path locations for you to explore where GPS can be of assistance.

In addition to that, it is a great extra to add on to find a gas station, restaurants, hotels, and more.

Booster Seat

Go Car Rental offers booster seats for any traveler that needs one. They are certified and safety-approved baby seats that are suitable for children 0-12 months old or 0 - 13 kilograms up to 8 years old or 46 kilograms.

Booster seat placed in the backseat of a rental car in Iceland.

There are so many things to do with your kids when traveling to Iceland! Check out our full guide for traveling to Iceland with kids.

Roof Box

If you are on a serious adventure chances are you need a Roof Box. These boxes provide additional space for you and your travelers during your road trip. It is a great way to store camping supplies, hiking gear and so much more.

A roof box attached to the top of a gray minivan rental car in Iceland

You can even put extra luggage in the roof box if you are traveling with a group of people and need extra space. The roof box we offer is 330L.

Not Covered By Insurance

Here are some examples of circumstances that are not covered by insurance. This will be listed in the fine print of your rental agreement. You can also ask your rental car specialist about anything you are unsure of.

  • Intentional damage or damage due to gross negligence on the driver‘s part. You need to treat your rental car as if it was your own to avoid any extra costs.
  • Damage resulting from the driver being under the influence of alcohol, stimulants, or sedatives or in any other way incapable of driving the vehicle safely. It is pretty simple, drive sober!
  • Damage due to race or test driving. Make sure to be conscious of Iceland’s speed limits. Save your need for speed for hiking through Iceland's mountains instead.
  • Damage due to war, revolution, civil unrest, or riots. This is unlikely in Iceland, thanks to it being one of the most peaceful countries in the world.
  • Damage that is done by animals. Iceland has a lot of free-roaming animals, such as sheep. The best way to avoid this is to slow down and be aware of your surroundings.
  • Holes burned into seats, carpets, or mats. Don’t be that traveler!
  • Damage affecting only wheels, suspension, batteries, glass (other than windows), radios, or loss by theft of parts of the vehicle and damage resulting from this.
  • Damage caused by driving on rough roads to the vehicles transmission, drive, and other parts that are in or attached to the chassis; damage to the chassis resulting from the vehicle scraping bottom on rough roads as a result of ridges being left by road graders; stones lodged in the road surface or on the shoulder of the road. The same applies to damage occurring when stones are thrown up, striking the vehicle‘s underside during driving. This could include F-Roads, so always research the roads before driving on them.
  • Damage resulting from driving in places where vehicle traffic is banned, such as paths, tracks, banks of snow, ice, unbridged rivers or streams, beaches, places only accessible at low tide, or other trackless areas. This could also result in a big ticket, so read the road signs.
  • If the lessee is spotted and proven to be driving off-road, driving on F-roads with a non-4x4 vehicle, driving on closed roads, or any roads not suitable for the vehicle currently driving, the lessee accepts to pay an additional fine of 250€.
  • If the vehicle is transported by sea, no compensation will be paid for damage caused by sea spray/seawater. This also includes any water damage to the vehicle
  • Damage to the door, fender, hinges, or any other part damaged due to the wind catching the doors. Just another reason to check Iceland’s weather before hitting the open road.
  • Damages to passenger cars and/or 2WD vehicles caused by driving on roads marked with an F on public maps as well as driving on Kjölur (road 35), Kaldidalur (road 550), and Dettifoss road east side (road 864). These are dangerous and rough roads, so always ask our rental car specialist before taking on certain F-Roads.
  • Damage to the rims of the rental vehicle.

Damage review

When you pick up the car you will do a damage review of the vehicle. This allows you to check if there are dents, scratches, or issues made by previous renters. Make sure to fully inspect the vehicle before leaving.

If you see something off, ask about it. The rental car team wants to guarantee every issue is taken care of.  The damage review exists so the new renter is aware of any damage that the vehicle already has. It protects the new renter from being held responsible for it upon the car’s return.

Rental Cars Types

Now that you know what to expect with your car rental agreement and insurance options, it’s time to choose your rental car. We have a variety of vehicle options and here are the different types you can choose from.

Small rental cars

Our small rental cars are perfect for solo travelers or those visiting in smaller groups. Our fleet of well-maintained vehicles is equipped with the latest features to ensure your road trip is comfortable and safe. We also offer a variety of fuel-efficient rental cars, which can help you save money on gas during your Iceland road trip.

Midsize rental cars

If you want the same comfort of a small vehicle but more room, check out our midsize vehicles. You'll have plenty of legroom and space for your gear, luggage, and snacks. This type of car is perfect for medium-sized groups visiting Iceland.

4X4 rental cars

If you're seeking an adventurous trip through Iceland, it's likely that a 4X4 vehicle will be necessary. Our 4x4 SUV rental cars in Iceland are a great fit for those who want to explore off the beaten path. If you plan on driving F-Roads, a 4X4 vehicle is necessary as it is illegal to drive them without one.

Minivan rental cars

Minivan rentals are ideal for a large group or family. Go Car Rental Iceland has a variety of spacious Minivans. These vehicles can seat anywhere from 7-9 passengers. We even have one 4X4 minivan if you still want to travel on Iceland’s F-Roads.

Do you need a 4x4 to drive Golden Circle in Iceland?

One of our most common questions is “Do you need a 4X4 to drive the Golden Circle?” The answer is no.  That means you do not have to worry about driving any F-roads that could cause damage to a 2WD vehicle. The road is fully paved and can be driven any time of the year too.

Here is our Complete Guide to driving the Golden Circle. It even includes a map!

Do you need a 4x4 to drive the Ring Road in Iceland?

You also do not need a 4X4 to drive Ring Road in Iceland. However, we do recommend it. While most of the road is paved, there is one section in East Iceland that is relatively bumpy. It may make you and your party feel more comfortable to have a 4WD vehicle.

4X4 vehicles are also fantastic for exploring side roads near Ring Road. This could be a waterfall that a local told you about or visiting a lesser-known hot spring. Some of these places may have gravel-like roads. These roads could be rough on a 2WD and potentially damage your rental car. Renting a 4X4 for Ring Road could put your mind at ease and keep you safe.

Renting a car is such an easy process at Go Car Rental in Iceland. As long as you review your rental agreement and follow the rules, you will have nothing to worry about. That way you can spend more time admiring Iceland’s waterfalls, soaking in the country’s hot springs, and driving the country’s popular routes.