Iceland is a country where there are no railways and you can not get by bus everywhere (except for larger cities). If you do not intend to hitchhike, then the only way to travel around Iceland by car.
Unfortunately, this does not mean that renting a car in Iceland is cheap. On the contrary, when compared to, for example, the price of air tickets, car rental is very expensive.
So if you are planning your trip to Iceland, you should at least have a rough look at the prices for car hire at the airport, Reykjavik or other locations.
But renting a car can be one of the most expensive items on your budget, most likely after accommodation expenses.
That is why I recommend everyone to book a car in Iceland as soon as possible, because during the season the cheapest cars will quickly disappear from the offers and the most advantageous ones will be quickly occupied.
In Iceland, there is the possibility of renting a car from the locals, but even here the offer of cars is limited and vehicles at the lowest prices are already at least for July and August for longer periods.
But if you have nothing else left, then you can use the Economybookings.com website to compare prices from individual rental companies in Iceland and, if necessary, book a car through them.
The cheapest car rental is not always worth it
There are many car rental and campervan rentals in Iceland.
When you look at the rental prices for a day, you are likely to search for the cheapest rental and cars available. But it’s not always worth it.
The main reason may be that cheap car rental companies do not have branches throughout Iceland.
In the event that something happens to your car and it is immobile, you have to rely on yourself and it is not possible to contact the nearest branch from where they will bring you a new car or provide towing.
Cheaper car rental companies in Iceland do not always have to act professionally and fairly.
On the Internet, you can read many stories where fleet managers have tried to get as much money out of clients as possible by charging everyone, even an almost invisible scratch or car damage.
This can cost you a lot of money (especially if you don’t have insurance).
The largest car rental companies in Iceland
Perhaps the most famous and largest car rental company in Iceland is Hertz or Avis, through which I would recommend to rent a car. The cheapest car on offer is the Hyundai i10, which costs approximately 9000 ISK / day (without insurance).
However, the Hyundai i10 is not a suitable car for all Icelandic journeys. If you plan to drive off the main N1 road (which runs around Iceland), you should think about something bigger and probably a 4×4 vehicle.
Economybookings.com is one of the most famous sites about Iceland where you can also rent a car or book a trip. It is a proven company that offers vehicles of all categories and the price range is very similar to Budget.is.
Other car rental companies in Iceland:
Car rental on a debit card
In Iceland, most car rental companies are ready to rent a car on their credit card. In this case, you do not have to pay a deposit or extra insurance, because if something happens to the car, the money will be deducted from your card.
Read more: What currency is used in Iceland?
However, if you do not have a credit card, car insurance may cost you a bit more expensive, because in the conditions it may be necessary to pay premium insurance or pay a deposit, which can easily be worth 500 USD or more.
For this reason, you should always read the terms and conditions of the company and, if necessary, call or write them an email and make sure that they will lend you a car even without a credit card.
Car insurance in Iceland
If you look at car rental prices in Iceland, then you may say that they are not as high as they say.
However, these prices are without the extra insurance that is necessary in Iceland in many cases. And even with insurance, the final price can reach thousands of crowns for a car rental per day.
A common car insurance is insurance against sand, which can scratch the car in strong winds. Gravel protection insurance is similarly used, because many of the roads in Iceland are not paved and you only drive on gravel, which can of course damage your car.
On the contrary, insurance that you will almost certainly not use in Iceland is theft insurance. Thefts are really rare outside the capital and you can often see that the locals (especially in winter) leave the car in the parking lot and go shopping.
Car rental for under 25 years
Some car rental companies have additional information in the conditions, which relates to the age of the driver. If you are a young (and inexperienced driver), you may not want to rent a car at a classic Icelandic rental company.
Fortunately, this does not apply when renting cars from locals through Carrenters, so you can try your luck there.
Rent and hire cars from locals
In addition to classic car rental, the Carrenters.is service also operates in Iceland. In fact, it is a marketplace that unites car renters and locals who are willing to rent their car in one place.
As you can see on the web, the offer of cars is very diverse, but above all there are much lower prices than in the case of classic car rental.
Do you need a 4×4 in Iceland?
First of all, it is necessary to realize that roads in Iceland are really different than in the most of the countries in Europe or USA.
Although the main road that runs around Iceland is almost everywhere asphalt, many routes to interesting destinations are only gravel.
In addition, there is a type of road, called F-road, for which you need higher 4×4 cars, as their quality can be really poor. You can encounter various problems, whether stones or holes on the road, paths over rivers without bridges, snow-covered roads that do not roll off, etc.
Therefore, you should always consider car insurance. Some of the rental companies offer partial car insurance, but always read what it includes.
How to avoid extra charges for vehicle damage
Car insurance is one of the ways to avoid unwanted payments for scratches or other damage to the vehicle.
Another option, which is often recommended, is to go through the car directly with the rental agent when renting, check everything, and also take a picture of the current condition of the car before taking it.
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