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.
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.
GuideToIceland.is 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:
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.
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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.