Car Rental in Reykjavik - Driving Guide & Best Rates

Renting a car in Reykjavik is highly recommended for tourists planning to explore Iceland's stunning countryside, waterfalls, and natural attractions beyond the capital. While Reykjavik itself is compact and walkable with decent public transport, a rental car becomes invaluable for visiting the Golden Circle, South Coast, or any rural destinations where public transport is limited or non-existent. Iceland drives on the right side of the road, making it comfortable for North American and European visitors. Road conditions in Iceland vary significantly - main routes are generally well-maintained, but rural roads can be challenging with gravel surfaces, single-lane bridges, and unpaved F-roads requiring 4WD vehicles. Winter driving demands experience with snow and ice conditions. Skip the rental if you're staying exclusively in Reykjavik, as parking can be limited and expensive, and the city is easily navigable on foot or by bus. Key considerations include Iceland's strict drink-driving laws, variable weather requiring cautious driving, and the need to check road conditions daily. Car rental offers unmatched flexibility for Iceland's dispersed attractions, but ensure you're comfortable with potentially challenging driving conditions and check current rental rates through booking platforms.

Valid Driver's License

A valid driver's license from your home country is typically accepted in Iceland. The license must be in Roman alphabet or accompanied by an official translation.

International Driving Permit

An IDP is recommended for non-EU/EEA license holders, though not always legally required. It serves as an official translation and may be requested by rental agencies.

Minimum Age

Most rental agencies require drivers to be at least 20-25 years old, with some vehicle categories requiring drivers to be 23 or older. Age requirements vary by rental company and vehicle type.

Credit Card

A valid credit card in the driver's name is required for the security deposit. Debit cards are generally not accepted for the deposit, though policies vary by agency.

Insurance Coverage

Basic insurance is typically included, but additional coverage for gravel damage, ash damage, and theft is strongly recommended due to Iceland's road conditions. Check current coverage options with rental agencies.

Driving Experience

Many rental agencies require drivers to have held their license for at least 1-2 years. Requirements may be stricter for larger vehicles or 4x4 rentals.

Keflavík International Airport (about 45km from Reykjavik) typically offers the widest selection of rental agencies including both international chains and local Icelandic companies, though city center pickups are available if you're staying in Reykjavik first.

Before driving off, thoroughly document any existing damage with photos and verify you understand Iceland's unique driving conditions - check that you have appropriate insurance for gravel roads and weather conditions common in the area.

GPS navigation is highly recommended as Iceland uses route numbers rather than street names in many areas; most rental agencies offer GPS units, or ensure your phone has offline maps downloaded as mobile coverage can be limited outside Reykjavik.

Fuel stations in Reykjavik accept credit cards at self-service pumps (often requiring a PIN), and parking in the city center typically requires payment during business hours - check current parking rates and zones before leaving your vehicle.

Plan to return your car with the agreed fuel level (usually full tank) and allow extra time for the drive back to Keflavík Airport if that's your drop-off location, as weather and road conditions can affect travel time.

Winter driving conditions in Reykjavik can be extremely challenging with ice, snow, and limited daylight hours - studded tires are often necessary and some rental companies require winter driving experience.

Reykjavik's roundabouts are common and follow right-of-way rules that may differ from other countries - vehicles already in the roundabout have priority, and proper signaling is strictly enforced.

Parking in central Reykjavik requires payment during business hours and regulations are strictly enforced with significant fines - always check posted signs as zones and times vary by area.

Sudden weather changes are common year-round in Reykjavik, with strong winds and reduced visibility possible even in summer - check weather forecasts before driving and be prepared to adjust plans.