International agencies

Disputes are a recurring problem in Iceland. Some tourists get charged thousands of euros unfairly months after their departure. The instinct would be to go with an international company like Avis, Hertz or Sixt .

From browsing forums we found that most complaints or scam reports involve these large companies (unjustified post-trip charges, poorly maintained cars, etc.). Of course, we keep in mind in our analysis that they capture a large share of bookings.

Do you believe that in case of a scam it will be easier to get justice? You are mistaken. Iceland is a tiny market for these corporations, a dispute will have very little impact on their operations. The proof is that despite the many reports online, most travellers continue to use these companies first.

Local Icelandic agencies [Our recommendation]

Local rental companies are known to be more reliable and cheaper . Too many bad reviews online would be disastrous for their reputation. That doesn’t mean you’ll have no problem with them. But with over 60 providers… how to choose? To guide you through this jungle, we reviewed their offers and online reputations.

Directly with the companies [Our recommendation]

Some well-known agencies like Reykjavik Cars chose to stay independent. Visit their own website to check their offers.

Local comparison site [Our recommendation]

The Icelandic car-rental market is split among at least sixty providers. The most effective route is to use the main comparison sites of the island: Guide to Iceland and Northbound.

These two sites guarantee the best price . In other words, if you find a lower rate elsewhere, you can request a price match . International brands like Hertz or Europcar are also listed on the comparison. With some providers you can cancel free of charge your car rental up to 24 hours before departure.

International comparison sites

Discover Cars, Rentalcars.com, Auto-Europe, etc. These are intermediaries between you and the rental companies. Their offers are attractive because they manage to negotiate big discounts from big brands. They also propose their own insurance packages but they’re not immune to sand storms.

To answer this question, we studied the offers and online reputation of over 60 agencies in Iceland. If the price difference between two offers is not significant, it is preferable to pay a bit more for a reputable rental brand . Below are the generalist providers with the best reputations. You will find all the agencies tested and the methodology used at the end of this guide.

The choice of vehicle depends primarily on your route, the season, and your budget. Below is a simple overview to help you decide:

🚗 Small city cars (Toyota Yaris, VW Polo...)

Ideal for short stays around Reykjavik or the Golden Circle. Not recommended for winter, nor for driving on F-roads.

🚙 SUV / 4x4 (Dacia Duster, Suzuki Jimny...)

The preferred option for most travelers. A 4x4 offers more comfort and safety, especially on gravel roads and in case of wind. Required for highland routes.

🏕️ Camper vans / Motorhomes

Perfect for those who want total freedom. However, access to some interior roads is restricted, and driving can be more challenging in wind or rain.

To get the best rate, book early! Prices can double between winter and summer, and availability becomes limited from May to August.

In Iceland, standard car rental insurance rarely covers all the risks. Here’s a quick summary:

✅ CDW / Collision Damage Waiver

Basic coverage that limits your liability in case of accident. Usually includes a deductible.

🪨 GP / Gravel Protection

Highly recommended! Protects against damages from gravel chips on bodywork or windshield — a common issue in Iceland.

🌋 SAAP / Sand and Ash Protection

Essential in South Iceland. Covers damage caused by volcanic ash or sand storms.

🌊 Theft Protection / TP

Optional but inexpensive. Car thefts are extremely rare in Iceland.

Before leaving the rental agency, take 10 minutes to carefully inspect the vehicle.

• Photograph all sides of the car, including wheels and roof.

• Verify that scratches and dents are noted on the inspection sheet.

• Check tire pressure and windshield wipers.

• Make sure you have the emergency equipment (triangle, spare tire, etc.).

Driving in Iceland is easy, but weather and road conditions can change fast. Always stay cautious.

• Speed limit: 90 km/h on paved roads, 80 km/h on gravel roads.

• Headlights must be on at all times, even during the day.

• Watch for sheep crossing — especially in summer!

• Never drive off-road — it’s strictly prohibited and fined heavily.

• Be careful when crossing rivers on F-roads: check depth and flow first.

In 2026, fuel prices in Iceland fluctuate between 2.40 € and 2.70 € per liter . Gas stations are rare in remote areas — fill up whenever you can.

• Payment is usually made with credit or debit card at the pump.

• Some stations accept prepaid cards available inside.

• The most common brands: N1, Orkan, Olís.

While the majority of rentals go smoothly, there are a few bad experiences to be aware of:

• Unjustified charges weeks after the trip (especially for “new damage”).

• Lack of proof or photos when claiming for damages.

• Extra fees for cleaning or fuel despite full return.

Renting a car in Iceland gives you complete freedom to explore the island. To travel with peace of mind, choose a trusted local company, take full insurance, and prepare your itinerary ahead of time.

If you’re still unsure, our top choice remains Reykjavik Cars for their balance of price, service, and reliability.