Renting a car in Iceland is crucial for a trip that’s fun and flexible. There’s no better way to explore the country’s vast landscapes and otherworldly scenery. But Iceland is a notoriously expensive destination.
If you’re wondering, how much is it to rent a car in Iceland in year 2025? You’re in the right place! Let’s break down the prices and what affects them.
Average Cost to Rent a Car in Iceland
The cost of rental cars in Iceland varies depending on many factors that include seasonal variations, rental duration, and which kind of car you’re looking to rent.
Specialty car types, like 4×4 SUVs, will be more expensive than compact car models, while renting either type of car will be more expensive in the summer months versus the winter.
Renting a car in Iceland can cost anywhere from $50 to $300 per day. On average, a compact car will cost anywhere from $56 to $91 while a 4×4 SUV generally ranges from $92 to $125 a day.
Overall, Firefly Iceland offers the cheapest rental cars for budget travelers in Iceland.
Factors That Affect Car Rental Prices in Iceland
Several things can change how much you’ll end up paying for a rental car in Iceland. From the kind of vehicle you choose to the time of year you visit, these factors can all make a big difference in your total cost. Let’s take a closer look at what affects car rental prices in Iceland.
Type of car
Which type of car you need to rent, whether it be a 4×4, luxury car, or a standard compact vehicle, will greatly affect the pricing. Of course, compact cars will be the least expensive option.
Luckily, Firefly Iceland offers slightly older models of cars which allows us to offer them at a large discount
Rental duration
The amount of time you plan to rent a car will also affect the cost. Short-term rentals of about 1-3 days are typically more expensive than long-term rentals (7+ days) in terms of daily pricing.
Firefly Iceland offers discounts for weekly (or longer) bookings that help drive the overall cost of rentals down.
Seasonality
Rental cars are more expensive from June to August.
The off season, from September to May, is generally less expensive although you may want to book 4×4 vehicles in advance in the winter months to help navigate in the snow and ice.
Pick-up location
In general, picking up your rental car at Keflavík International Airport, where most rental car agencies are located, is less expensive than in the capital of Reykjavik, although it depends on the company.
Driver requirements
Drivers must be at least 20 years old with a valid driver license or an international driving permit. Some rental car companies will charge extra for young drivers (18 or 19 years old).
Keep in mind that drivers must be 23 years old to rent a 4×4 vehicle.
Gas prices
Don’t forget to factor in fuel costs when planning your budget. Gas prices in Iceland can be quite high and will definitely impact the total cost of your rental. Prices also vary depending on where you fill up. Gas stations in remote part of the country are usually more expensive than those in bigger towns or along major routes.
To save, use the fuel discount card that comes with every Firefly Iceland rental!
Extras
Keep in mind that extras like insurance, GPA, Wi-Fi, and children’s seats will be an added cost.
You can avoid these by safely using your phone for navigation, using insurance through your credit card (in some cases), and bringing your own car seats for children.
How to Find the Best Car Rental Deals in Iceland
If you’re looking to find the best car rental deals in Iceland (and who isn’t?!), here are a few tips…
Book early for better rates.
Book your rental at least three months in advance during winter and six months or more for a summer rental. The popular rental car can goes very quickly.
Compare prices.
Look at prices from multiple car rental companies in Iceland to find the best rates.
Travel in the off season
Renting a car in the off season, from September to May, is the least expensive time of year in Iceland.
Choose the right vehicle
Compact cars are great for summer Ring Road trips and getting around Reykjavik. These are generally the least expensive kind of rental car.
4x4s and SUVs are needed in the winter months and for driving on Iceland’s F-Roads in the summer.
Book with Firefly Iceland!
Firefly Iceland has some of the cheapest car rental rates in the country.
FAQs About Renting a Car in Iceland
What type of license is required?
Drivers will need a valid driver license printed in the Latin alphabet or an international driver license.
What is the minimum age to rent a car?
Drivers must be at least 20 years old to rent a compact car and 23 years old to rent a 4×4.
Do I need a credit card?
Yes, most car companies require a credit card for security deposits.
Many credit cards also offer rental car insurance. Check with your card provider to be sure you’re covered ahead of your trip.
What should I know before driving in Iceland?
Driving in Iceland isn’t hard, but it’s a bit different than what you might be used to — here’s what you need to know before setting off!
- Icelanders drive on the right side of the road.
- The speed limit in Iceland is usually 50 km/h in towns, 80 km/h on gravel roads, and 90 km/h on paved roads — make sure to follow the signs closely.
- Gravel roads are common, especially in rural areas. Drive slower and more carefully on these roads to avoid damage and stay safe.
- Be sure to research road signs ahead of time and check driving conditions on Iceland’s official website.
- NEVER drive off road in Iceland as the flora and fauna is very fragile and you could be fined heavily.
- You must keep your headlights on by law, even during the day.
- Keep your eyes peeled for herds of sheep and debris in the road.
- NEVER drink and drive! The acceptable blood alcohol level in Iceland is 0.05%.
- In the event of an emergency, dial 112.
How do I choose a rental company in Iceland?
Look for trusted companies like Firefly Iceland and read reviews to find reputable agencies.
Why Choose Firefly Iceland for Your Car Rental?
Affordable options:
Firefly Iceland offers some of Iceland’s cheapest rental cars due to its fleet of older yet reliable vehicles.
Fuel discounts
Firefly Iceland rental cars come with fuel discount cards attached to your keys, which means you’ll catch a break on gas too!
Convenient locations
Easily pick up your rental car at Keflavík Airport or other convenient car rental locations like Reykjavik.
Flexible policies
Firefly Iceland offers stress-free booking and cancellation options.
Reliable service
Firefly Iceland has experienced local staff who are ready and willing to give advice, help you navigate, and assist with your rental car questions.
Our well-maintained fleet of rental cars is perfect for any adventure in the Land of Fire and Ice.
Conclusion
Renting a car in Iceland is your best option for exploring the country. You’ll have the flexibility to discover off-the-beaten-path destinations, linger at beautiful waterfalls or black sand beaches, and take part in activities like chasing the northern lights!
Book your rental car with Firefly Iceland today for the best rates in the country, a reliable fleet of vehicles, and wonderful customer service.
