Car Rental in Reykjavik (2026) - Driving Guide & Best Rates
Car rental in Reykjavik: compare rental companies, daily costs, driving rules, parking tips, and road conditions for self-drive travel in Iceland.
Driving Requirements
Licenses in the Latin alphabet are generally accepted directly in Iceland. Licenses in non-Latin scripts (e.g., Japanese, Arabic, Korean, Chinese) typically require an IDP, obtain one from your home country's automobile association before travel.
Most rental agencies in Iceland generally require drivers to be at least 20, 23 years old, depending on the vehicle category. Young driver surcharges commonly apply for those under 25, check current policies with your specific agency.
Third-party liability is legally mandatory and typically included. CDW is strongly recommended given Iceland's unpredictable road and weather conditions. Check what your policy covers before departing.
Unique to Iceland, Gravel Protection (GP) and Sand-and-Ash Protection (SAAP) are strongly recommended add-ons due to loose gravel roads and volcanic ash exposure, standard CDW generally does not cover these damage types.
Most Reykjavik rental agencies require a valid credit card (Visa or Mastercard) in the driver's name for the security deposit. Debit cards are generally not accepted for deposit purposes, verify with your agency.
Driving Iceland's highland F-roads requires a 4WD vehicle with specific rental agency authorization. River crossings are generally prohibited under standard rental agreements. Verify F-road terms before booking.
Helpful Tips
Keflavík International Airport (KEF), located approximately 50 km from Reykjavik city centre, has multiple rental agencies on-site, picking up there lets you start exploring immediately, while city-centre offices suit travellers arriving separately. Check current availability through the booking widget below.
Before leaving the lot, photograph every panel of the vehicle and confirm the pre-existing damage report matches, Iceland's unique road conditions (loose gravel, sudden weather changes) make this important, and Iceland-specific add-ons such as gravel protection and sand/ash protection are worth reviewing with your agent.
Download an offline map (Google Maps, maps.me) before you drive, as mobile signal can be limited outside Reykjavik; Iceland's addressing system uses GPS coordinates alongside street names, so a GPS unit or a fully charged phone mount is strongly recommended.
Fuel stations become sparse as you leave the capital, so top up whenever you see one. Many rural stations are unstaffed and card-only 24/7, so a working international credit or debit card is essential, check current fuel categories with your rental agency.
Reykjavik operates a coloured parking-zone system in the city centre with paid hours on weekdays. Most rental agreements require the car to be returned with a full tank, so confirm the nearest fuel station to your drop-off point before your return journey.
Driving Warnings
Iceland legally requires headlights to be on at all times regardless of conditions, this is not optional, and driving without them can result in a fine; also, Reykjavik's roads can develop black ice with little warning, in autumn and winter months.
Weather in Reykjavik can shift rapidly from clear to blizzard or high winds within minutes, check vedur.is (the Icelandic Meteorological Office) and road.is for real-time road condition alerts before every journey, as conditions that were safe at departure may not be safe on return.
Speed enforcement in Iceland uses automated speed cameras, and tolerance for exceeding posted limits is minimal, urban speed limits in Reykjavik are generally 30, 50 km/h, and fines are issued without discretion for even small overages.
Reykjavik road layouts make heavy use of roundabouts where traffic already circling has right-of-way, drivers unfamiliar with this convention risk collisions, as the yield rule differs from the 'entering traffic has priority' norm found in some other countries.