Compare Iceland car hire

Thanks to its jaw-dropping landscape – which packs in everything from geysers to glaciers to black sand beaches – Iceland is a great place to explore in 2025. Hiring a car is the cheapest and best way to do it, and you can pick up a rental easily in Reykjavík or at Keflavík Airport (KEF).

Language: Icelandic | Currency: Kronas (kr) | Avg. Flight time: 2 hrs 45 mins

Iceland’s main international airport, based 49km (30 miles) west of Reykjavík, is the best place to rent a car if you plan on driving for your whole stay. There are plenty of car rental companies at Keflavík, including big brands like Budget and Europcar as well as independent options.

If you only want to hire a car for a day or two during your trip and you are staying in the capital, it’s also possible to pick up a rental in central Reykjavík. There are plenty of car hire companies to choose from, including local firms as well as familiar names such as Budget, Thrifty and Avis. Most offices are based in the Midborg and Laugardalur districts. The prices are sometimes lower than the airport branches, so you could get a better deal.

If you’re renting a car from Keflavík Airport, it’s worth noting that some car hire desks are inside the terminal building, once you go through arrivals, and some have offices outside of the building, to which shuttle services are available. After you’ve picked up your hire car, it’s a 40-minute journey along the coastal Route 41 to the centre of Reykjavík.

Car rental companies with desks at Keflavík Airport include:

• Avis (Tel: +354 591 4000)
• Sixt (Tel: +354 540 2222)
• Budget (Tel: +354 562 6060)
• Hertz (Tel: +354 522 4400)
• Europcar (Tel: +354 425 0300)
• Blue Car Rental (Tel: +354 773 7070)

To say that Iceland’s weather can temperamental would be putting it politely. At times, it can be outright hostile, which can make driving seem a bit daunting. However, the ease of navigation and the quiet roads somewhat make up for the challenging conditions.

There’s a main ring road that runs all the way around the country, with smaller roads running off it to connect to towns and villages.

Iceland is not very densely populated, and once you’re out of Reykjavík you can expect the roads to be very quiet if not deserted. The main ring road, which you're likely to spend a lot of time on if you're touring extensively, is paved and of good quality.

If you are staying close to Reykjavik and the Golden Circle, which connects the main attractions of the south-west, you are unlikely to come across gravel roads. If, however, you are seeing more of Iceland, gravel surfaces are more common. Slow down, especially when passing others, and you'll be fine.

It's worth taking the extra insurance for damage caused by gravel if you are going further than Reykjavik, the Golden Circle and the other attractions of the south west.

It's also worth noting that hire cars are prohibited on F roads, which are usually extremely rough and in the mountains. Don't panic, these are clearly marked both on the map you'll be given and at the roadside – you can't end up on one by accident.

Finding somewhere to park in Iceland is simple. You can normally park on the side of the road if there are no markings to tell you otherwise. It’s also usually free of charge, other than in busier areas like the centre of Reykjavík, where you might spot parking meters or parking garages.

Blue Lagoon

Driving time: 40 minutes

This natural geothermal spa is rightly famous, mixing warm, mineral-rich waters with a backdrop of snow-capped hills and rugged rock formations. There's even a swim-up bar (caution: Iceland drink prices apply). It's a popular stop on escorted tours, but with your own transport you'll be able to stay and chill for as long as you like. Try not to look too smug as those tour groups get rounded up.

Thingvellir National Park

Driving time: 45 minutes

Less than an hour’s drive from Reykjavík, Thingvellir National Park is a UNESCO World Heritage Site. Situated on a ridge between two tectonic plates, this geologically-fascinating attraction was the home of the first Icelandic parliament – you can see the ruins of stone camps built by parliament-goers during the 17th and 18th centuries and earlier. You can also go snorkelling, with a guide, in the chilly waters of the Silfra rift, part of Thingvallavatn lake.

West Iceland waterfalls

Driving time: One hour 30 minutes

Two of Iceland’s most dramatic waterfalls can be found a little further afield in the west of the country. Neighbouring Barnafoss and Hraunfossar are known for their black lava rock and vibrant blue waters. The longer drive is worth it to capture some incredible photos.

1. Driving off-road is illegal. It doesn't matter if you're in a souped-up 4x4 – leaving designated roads is prohibited for your own safety and to avoid damaging the country’s natural flora and fauna.
2. While most roads in the south west of Iceland are paved, there are a few densely-packed gravel roads. The gravel is there to prevent slipping and skidding in bad weather, but it can also cause damage to your tyres and windows if you drive too fast. Simply slow down and you'll be fine.
3. Be careful on single-lane roads. Some roads in rural Iceland are single-lane, and this is often the case on bridges and in tunnels. Look out for give way signs and drive slowly.

Fair fuel policy

A fair fuel policy (also known as full-to-full or same-to-same) means you’ll only pay for the fuel you use. All car rental deals compared on TravelSupermarket come with a fair fuel policy, so you can book your hire car safe in the knowledge there will be no nasty surprises at drop-off. More information on TravelSupermarket’s commitment to fair fuel policies can be found here.

No hidden fees

All rental deals compared on TravelSupermarket include mandatory fees (for example, one-way and young driver surcharges) in your rental quote at the time of booking, meaning you’ll know the full price of your car hire upfront.