Iceland is undoubtedly one of the best road trip destinations in the world, and renting a car might be the best way to experience this country.
It has so many picturesque landscapes and roads, including famous routes to try out (including the iconic ring road).
However, we know that choosing the right rental company can be overwhelming because there are just too many options.
Not to worry as we’ve narrowed down the choices for you.
Based on our own personal experience renting a car to road trip the Golden Circle in Iceland. As well as from endless car rentals in countries all across Europe.
Let’s dive right in…
Before choosing the right car rental for your Iceland trip, we highly recommend comparing and contrasting several options.
This will ensure that you get not only the best deals but also the ideal car for what you want and need.
But instead of opening multiple sites and comparing them yourself, you can use a comparison tool like DiscoverCars.
It’s one of the best car rental comparison websites that will make your search much easier.
They work with over 500 partners in 10 thousand locations throughout the world, so you know you won’t run out of options…
DiscoverCars is rated 4.6 stars on Trustpilot, and one of our favourite things is that you’ll get free cancellation and there are no hidden fees.
Basically, what you see is what you pay.
Some other benefits of using DiscoverCars are:
Hertz tops the chart for our version of the best car rentals in Iceland.
It has been named as the leading international car rental company in Iceland for five consecutive years, 2017 to 2022, by the World Travel Awards.
They have more than 50 years of experience in the local car rental industry, providing 15 stations across the country.
We’d recommend Hertz if you’re driving the Golden Circle, just because of the sheer flexibility of pick-up and drop-off locations.
Your rental comes with basic rental insurance but you can purchase add-ons.
Hertz also offers 24-hour emergency customer service and you can easily book travel tours through them.
Most of their vehicles are brand-new and you can browse through a diverse selection, no matter if you’re travelling in a small or large group.
The fleet includes everything from Tesla cars, 4×4s, small economy cars, luxury cars, campers and motorhomes, and more.
Pricing is also affordable and adjustable to your budget, which is great so everyone can find their perfect option…
Avis is another excellent car rental with lots of locations throughout Iceland, including those in airports and city centres.
One of the best things about Avis is that they have a flexible cancellation policy that gives you full cash refunds.
You can use the Speedy QuickPass for a pre-registration service to save you time on arrival.
As a huge global brand, they have a great loyalty program where you can get benefits like priority service, free rentals and more.
Another unique thing is that Avis offers free hotel pick-ups!
If you love Iceland, then Avis also offer car rentals in Norway and Sweden (these countries have the same vibe).
From small and medium passenger cars, luxury cars, 4Wds, to minivans, there is something to suit all sorts of travellers.
Whether you’re hitting the Icelandic road alone, with a significant other, or an entire family, you should be able to find the right vehicle from Avis.
You should also consider what kind of road trip you’re planning. Sticking to cities and main roads, or are you planning to drive on rough terrains?
Up next is Europcar, which has rental stations in multiple places throughout Iceland.
Their Best Price Guaranteed is great to ensure that you get the best rates for your car rental, though there are certain terms and conditions to pay attention to.
Europcar runs a Green Programme that prioritises sustainable development, and they’re actually the first car hire company in Iceland with certified eco-friendly commitments.
For future reference, Europcar is also a great option if you're planning a trip to Finland, as they offer rentals in Rovaniemi.
Europcar presents an extensive fleet that encompass different types of vehicles, including both automatic and manual transmissions.
You can choose from 5 or 9-seater capacities, as well as luxury and economy rentals, among others.
Not to mention EVs and hybrid cars, convertibles, and even sports cars.
If you were keen to avoid some of the larger chains, and opt for a family-run company, then Lava Car rental is a fantastic choice!
Starting out as just a 2 person team in 2016, they have rapidly grown to be one of the islands most trusted car rental firms.
They have a lot of very appealing perks many car rentals on offer. Including no deposit at pick-up, all insurances included as standard, & even free cancellation.
They have thousands of top quality reviews on both Trustpilot and Google Reviews; explaining why they have won numerous awards. Including World Travel Awards' coveted "Iceland's Leading Car Rental" award in both 2023 and 2024.
One thing these guys pride themselves on is only offering brand new, top of-the-line vehicles. Where older models still exist, they are clearly marked (as pictured above) and can help you bag a bargain if you want a cheaper rate.
One thing we quickly discovered in Iceland is that the weather varies MASSIVELY depending on which time of year you are there.
The March-time weather we experienced ranged from horrendous snow, through to clear blue skies and open green fields.
Well, no matter what time of year you visit they have something on offer. Including smaller economy cars, larger 4x4's and SUVs, & even electric vehicles.
If you were considering renting a campervan in Iceland, then these guys are also one of our top picks for exactly that! With an expanding range of campers, it really is worth checking out which vehicles these guys have on offer.
If you’re looking for a car rental that specialises in budget cars and deals, we’d recommend Thrifty.
They have four car rental locations, mainly in Reykjavik and Akureyri, as well as Keflavik International Airport where you can enjoy free shuttle service.
You can also refund your booking at short notice, which is perfect for those who need extra flexibility when planning their trip.
Thrifty is known for their excellent service too. This includes fast responses and quick pick-ups and return processes.
Not only that, but they offer some of the cheapest car rentals in Iceland.
Despite being marketed as a value car rental, Thrifty actually has a fair range of quality vehicles!
From small cars to vans, SUVs, 4x4s and even some premium models.
They also have electric cars!
Another notable budget car rental in Iceland is, as it’s aptly named, Budget.
They’re great for being transparent in the pricing and having no hidden fees.
Budget itself has been running for 63 years with locations in over 3,900 places worldwide!
This company is also perfect if you’re planning a month-long or longer road trip.
Their long-term rental plan hooks you up with excellent rates, flexible dates (way better than a lease!), one-way rental options, and more.
In terms of vehicle types, Budget has quite a range to choose from…
This includes mini cars like the Hyundai i10, as well as compact models like the Hyundai i30.
Of course, you can choose between a manual and auto transmission.
Dollar Rent A Car in Iceland is also a fantastic choice for anyone who is looking for a no-deposit car rental.
They have a 100% free cancellation and modification policy, all-inclusive rates, and free protection, making it great for budget travellers.
Other benefits include unlimited mileage, roadside assistance and discounted fuel, and 10% off when you prepay.
You can find various cars and vehicles, including compact and intermediate models, and even minibuses.
It’s possible to return the car to a different location, although depending on which one there might be a drop-off fee.
Green Motion is our number one recommendation when it comes to sustainable car rentals.
From low-CO2 cars equipped with the best technology, recycling, and using renewable energy, you name it…
The only downside is that there are only two pick-up locations, so it’s only ideal if you’re starting your trip from downtown Reykjavik or the airport.
Green Motion offers different types of cars to suit everyone, from solo travellers to families going on road trips.
Every vehicle comes with the tech that minimises CO2 emission.
There are four main packages, from the best value to the most premium one with plenty of benefits and add-ons.
Alamo mainly serves the Reykjavik and KEF areas.
This car rental company began in 1974 and is known for its relatively affordable rates with excellent customer service.
Alamo offers some features including Accelerated Check-in, and various deals like the Last Minute and Plan Ahead Specials.
But what stands out is their excellent online platform, which includes real-time online check-in and weather tools, among others.
If you're planning to explore more of Europe, then Alamo also offer car rentals in Austria and Romania among a whole host of other countries.
The vehicle fleet includes 21 car types, 11 SUVs, and 2 vans.
It’s probably not as comprehensive as larger companies like Hertz or Avis, but still a pretty impressive range!
Brands range from Mercedes, Jeep, and Audi to Kia, Chevrolet, Toyota, Hyundai, and more!
Nordic Car Rental is a great option that accommodates different budgets and group sizes.
Though locations are only in Reykjavik and Keflavik, the company offers 24/7 pick-up and drop-off services.
CDW (Collision Damage Waiver) is already included for your rental without any additional fees.
So if you're looking to hire a car in Iceland, we'd recommend checking out this company.
Their rental cars vary for a wide range of travellers, with more than 30 different models.
This includes small, economy cars for couples and small groups, 4x4 vehicles for those wanting to explore rugged terrains across Iceland, and minivans for large groups.
There are plenty of tips you can find online before hiring a car in Iceland, but the most important thing is to make sure to get extra insurance. The roads can also be slippery and the weather fickle, so be sure to be prepared.
You should also watch out for wild animals on the road, as there might be plenty of sheep and horses crossing.
Yes, foreigners can rent a car in Iceland with a valid home driver’s licence. You don’t need an international licence.
But you do have to be at least 21 years old in order to rent a car here.
It makes sense to rent a car in Iceland because a lot of the destinations are spread out across the country. The roads are beautiful and very scenic, so driving is the best way to experience all that Iceland has to offer.
Alternatively, you can rent a campervan or motorhome in Iceland to save even more money on accommodation. Iceland certainly isn't one of the most affordable countries in Europe (quite the opposite), so at least you'll spend less this way.
It depends on when you’re visiting. During winter, it’s probably best to rent a 4-wheel drive as it gives you more freedom to explore off-the-beaten paths. This is because the road conditions and weather can get quite challenging and treacherous!
That wraps up our top recommendations of the best car rentals in Iceland.
Hopefully it’s helped clear through some of the confusion of finding the ideal choice, and helped you make your mind up on who to go for!
Now it’s over to you…
Which one will you go for?
Have we left out any great rental companies?
Let us know in the comment section below.
In our opinion, Iceland is one of the best places to visit in Europe (if not the world).
There are so many fantastic spots to visit as well as unique experiences, so you're in for the trip of a lifetime!
Here are some other guides you may find helpful:
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