Having access to a car gives you the ultimate freedom in seeing the island on your own schedule. However, if you plan to stay in Reykjavík for most of your trip or want to do short day trips in the southern or western parts of the country, it’s not necessary to rent a car; you can book tours and travel by bus. But if you want a rental car and the freedom that comes with it, expect to pay dearly, especially in the summer months.
Road conditions in Iceland can change quite quickly, as the weather is unpredictable. As a rule, always check road conditions before you head out on a trip. The best way to get information about road conditions and the weather is to call 1777 (or tel. 354/522-1100). The line is open 8am-4pm in the summer and 6:30am-10pm in the winter.
The Ring Road (Route 1) is the most accessible and popular route around Iceland. It runs 1,332 kilometers and connects most of the most popular tourist attractions in the country. The Ring Road is paved for most of its length, but there are still stretches in East Iceland with an unpaved gravel surface. F roads are unpaved tracks that may only be driven in vehicles with four-wheel drive. Some F roads have river crossings, so trying to navigate with a compact car is dangerous.
GPS coordinates are a popular way to navigate Iceland. You can input coordinates into navigational apps or GPS units for directions. However, it’s important to keep in mind that sometimes roads are closed, so do some research on the route you plan to take, not just the shortest distance. You don’t want to wind up stranded.
Car rental prices remind you that you are very much on an island with very little price competition. In short, it’s wildly expensive to rent a car and pay for insurance, and gas prices are sky high.
You can rent a car in advance or at the rental office at Keflavík International Airport, at BSÍ bus station, or within Reykjavík once you’re settled. In the summer, with growing tourism, it is recommended to arrange your rental in advance as some dealers sell out early.
Choosing the right car for your trip depends on what you want to see and where you plan to go. If you plan on staying close to Reykjavík and traveling on well-paved roads, such as the Ring Road, a compact car is the best and cheapest option. However, if you plan on going out to the countryside or to the highlands, don’t try to get away with renting the cheap option. If you try to bring a compact car into a region that requires four-wheel drive, expect damage to the car at best, and being stranded and needing to be rescued at worst. Be smart and be prepared.
For insurance, car rental companies provide “full insurance” for each rental, which is the basic third-party insurance option. For an extra fee, drivers have access to “extra insurance” that includes a collision damage waiver. However, be aware that you will not be covered for damage caused by rocks, snow, wind, ice, and all the other elements that could damage a vehicle. If you have any damage to a car, you will be charged…a lot. Be sure to choose the right insurance for the region you plan to travel to.
Rules of the Road
Always drive with headlights on (day and night). Do not drive off-road (expect heavy fines). Always wear your seat belt, and watch out for sheep and birds in the countryside.
Do not drink and drive. The law forbids any driving under the influence of alcohol, and police aggressively monitor drunk driving.
Do not speed. Always remember that roads are unpredictable and car accidents involving foreign drivers are quite common. You can be traveling on a quiet, scenic paved road that suddenly turns into an unpaved, rough section. You can lose control of the car quite easily. The maximum speed limit for the entire island is 90 kph (55 mph), but in towns and residential areas, it can be much less. Always respect the limit. If you do speed and are caught by a police officer, expect a huge fine and a stern talking to. Don’t risk it.
Monitor the weather forecast. Driving in Iceland can range from peaceful to harrowing, depending on the weather. To check road conditions, visit the Icelandic Road and Coastal Administration website. If there is an advisory, due to wind, rain, snow, or a volcanic eruption (it happens), stay off the road. Advisories are to be taken seriously.