Reykjavík Basics: Some thoughts on car rental in Iceland

Please note!

My buddy James that is mentioned in this post who used to rent out cars through has closed shop and is no longer offering any cars. As it turned out, the cars were too cheap from him to stay in business. Cheap Jeep also went out of business after some run in with the authorities. It seems like someone is operating under the same name now but I don’t know whether it’s the same people or what this company is about. All I know is that after the debacle with the insurance I mention at the bottom of this post I would not recommend them anymore.

If you want to rent a new car for affordable prices from a company I personally trust, you can check out this car rental offer.

Despite being a big supporter of public transport I think the best way to travel around Iceland is by renting a car. I base that opinion solely on the fact that it doesn’t suit my personality to be told where and when I can stop and to follow strict rules about timing and such. Don’t get me wrong. I plan. I just follow my own plans quite loosely. I’ve been asked so many times about renting a car in Iceland and here are some of my thoughts.

Road trip in Iceland

There was a post by me permanently pinned on the Reykjavík board on Couchsurfing for a while that I wrote about car rental in Iceland shortly after the economic crash and the eruption in Eyjafjallajökull. After these events we saw a gold rush in Icelandic tourism and all of a sudden a whole lot of people were offering services, including car rental, that they didn’t have a license for. With car rental in particular, we saw a lot of rent-a-wreck type of companies and although most of them were legal there were some bad seeds in between. I heard some really sad stories from some very disappointed travelers.

The post reminded people about being aware of who they were doing business with and pointed out that although it might be cheaper to rent a wreck, especially under the table, you can’t expect the same service from a small company with one service point and 5 cars and a big one with 10 service points and 1500 cars. This extra service is partially the reason why the bigger companies charge more, albeit surely not the only one. If something happens you want to make sure that the insurance and service part is OK and that you have a signed contract stating all the terms.

I don’t see anything wrong with renting the older cars and for day trips out of Reykjavík I would definitely recommend it. Some of the agencies with the older cars also have good service all over the country and I haven’t heard of anyone for a long time that doesn’t do things 100% legally. I’ve recommended Cheap Jeep to people and my buddy James’s Affordable Car Rental more times that I can remember and I don’t remember anyone ever having any troubles with them. James at ACR is one of the nicest people I know who would do anything for anyone and is really passionate about his cars. He also has people sign contracts, has all the insurance matters in order and goes out of his way to help those who run into troubles.

James loves him a good Volvo - image via

James loves him a good Volvo – image via

Because I’m a stereotypical girl that knows nothing about cars and am too afraid to even add oil to the system on our own car, I would freak out if there was something wrong with the car I was driving. Therefore, for longer trips, I like new cars and the reassurance that if something happens someone will be able to rescue me ASAP. Especially when I’m traveling without the boyfriend. When we got a flat tire on top of a mountain on our way to Rauðisandur once, he knew exactly who to call for help while I got myself ready to camp and eat grass until I’d be found frozen in a ditch somewhere. Never travel without a spare in the Westfjords!

That moment when you realize you're far away from civilization without a spare tire

That moment when you realize you’re far away from civilization without a spare tire

As I’ve hinted on Facebook and Twitter recently Special Reporter Helga and I will be going on a road trip around Iceland in May. We’ll be 10 days on the road, driving more than 2000 km, covering the whole ring road and more. So when I thought about what company to approach for the car the first one that came to mind was Europcar. I worked with them for 7 years at my old job and know the company quite well. I know that they treat their staff well and they have an ISO environmental certification, which matters to me, but their fleet is also young and their tires good. They are not the cheapest but their service is excellent.

Both the bigger companies and the smaller ones have something to offer, depending on what you are looking for, and comparing the two is like apple and oranges. There are many car rental companies out there that you can do business with and these are just the ones I have personal experience with. I’ve also heard nice things about SAD cars for example but whoever you chose, make sure you know what you are getting yourself into. If an offer seems to be too good to be true, it probably is too good to be true. Above all be safe and keep in mind that sometimes you get exactly what you pay for.

Update August 22nd 2013: It was on the news this week that Cheap Jeep was renting out uninsured cars and they were being investigated regarding the matter. I don’t know the back story but if they are renting out uninsured cars I can’t with good conscience recommend them. Make sure you check into these things if you rent a car from them.

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39 thoughts on “Reykjavík Basics: Some thoughts on car rental in Iceland”

  1. Kelly says:

    Thank you so so much for this article. Heading to Iceland in Sept and looking for a car rental company.


    1. sverrirt says:

      I think this is something for you, – the happy way of travelling !

  2. Do NOT rent from SAD Cars. We got a beat up Toyota with 150000 km on it that smelled bad and felt like it was going to fall apart. When we got in, there was ZERO gas in it AND the check engine light was on. Tried to go to gas station, and felt like the bottom nearly fell out of the car going over speed bumps. Made it to the gas station on fumes and got just enough to amble the car back up the hill and give it back to them. They told us we would not get a refund on the five days we had prepaid — but I was SO SCARED to drive that car, I said “whatever”. Renter beware! After this, I went to Budget nearly in tears, and they hooked me up with a very sweet Skoda Octavia which was a good, reliable travel partner in Iceland for the next five days 🙂

    1. mm Auður says:

      I’m sad to hear that you had such a bad experience but glad it didn’t ruin you stay in Iceland 🙂

      SAD cars state on their website that their cars are old and unfortunately this is not the only story I’ve heard about these rent-a-wreck type rental places. However, I have heard as many of not more positive stories so I guess it can go either way.

    2. Andreas D. says:

      Well, that sounds quite familiar to me. We’ve rented a 4×4 at SAD Cars in 2012 and the description of your car fits quite well to ours. No gas, permanently glowing engine fault light, rust, some body parts of the car seemed to be borrowed from a different model… The really nice guy there told us that everything is ok with the engine, but they just didn’t have the electronic equipment to reset that warning light. Well, well… The car ran ok – besides almost losing our rear bumper on the way to Solheimarjökull (one screw just broke off because of the rust) and some scary moments, when in the middle of nowhere the engine refused to start sending out thick clouds of fume… Well, it finally started and we got to Keflavik without problems, but you get an idea what to expect if you choose that company. 😉

    3. jhnn says:

      come on … as Auður said: “keep in mind that sometimes you get exactly what you pay for”. my sadcar was quite awesome.

  3. Geoff says:

    My wife and I rented an old Subaru Legacy from Cheap Jeep back in 2011 for our 21 day honeymoon road trip around Iceland. The car had small issues such as rattles, bad smells, and wheels that needed to be balanced and rotated. Nothing major. The car got us around the entire country safely, including the Snæfellsnes peninsula, Rauðisandur, the puffin cliffs, Ísafjörður, Drangsnes, just to name a few. There was only one time when we were worried, when we were climbing a steep hill near þingeyri in low gear and the engine overheated and lost all of its anti-freeze right at the top of the mountain at the radio tower. We waited a couple hours for it to cool down and we were good to go after filling the radiator with warm water. After that the car didn’t have any issues for the rest of our trip around the country.

    The people at Cheap Jeep were nice and the cars seem to be in good enough condition. My only complaint would be the price. This isn’t a complaint about Cheap Jeep, but about rental prices in Iceland in general. It is possible to get a rental in the USA for much cheaper than Iceland on a weekly rate. Even the cheapest car during Iceland’s peak tourism costs an arm and a leg, especially for 21 days.

  4. Pete L says:

    We rented a car back in November 2011 from City Car Rental via and had no troubles from them at all. They picked us up from our hotel, took us to their office where we did all the paperwork, then sent us on our way with a map and told us to leave the keys in the glovebox when we dropped it at Keflavik.

    Got a phone call when we landed in Norway asking where the keys were. I said “in the glovebox”.
    “But the car is locked.”
    Apparently the missing instruction was to leave the car UNLOCKED with the keys in the glovebox. Whoops!

  5. Mark says:

    Since 2010, I’ve rented cars six times with City Car Rentals (CCRentals). In general, my experience has been positive. The cars are a bit older, but they have seemed sound and have worked fine (though, see below). The price is significantly better than, say, Hertz, which is nearly twice as expensive.

    My original complaint with CCRentals, but apparently this is true with most Icelandic car rental companies, was that the cars come with random amounts of gas in them. I’ve gotten over it, but I really don’t appreciate getting a car at 6.30am that has less than 1/8th of a tank of gas. This has happened to me a few times. It means my first adventure has to be to be to find a gas station, and I think that’s lame. Like I said, I’m over it, but it’s still annoying.

    What I haven’t gotten over, and what really pisses me off is that in the last year or so, CCRentals has stopped actually delivering the cars at KEF. You and I are charged a EUR20 fee to “pick the car up at KEF”, but instead of having the car actually in the parking lot at KEF (which they actually did for a while), you have to get in their van and drive 10 minutes to their office. That’s not the service I’m paying the EUR20 for, gentlemen.

    Which brings me to my most recent trip that ended just a few days ago. First, the car wasn’t at KEF like it was supposed to be. I had to go in the stupid van again DESPITE confirming emails that the car needed to be actually at KEF. Next, the car wasn’t actually ready when we got to the office. We had to wait for them to move the roof box from another car on to our car DESPITE the fact that this was pre-arranged and supposed to be waiting for us. The car had a slow leaking tire (embedded screw), which ended up being flat in two days time, which we had to repair. Inconvenient. The rear window wiper was broken. The front window wipers were in obvious need of replacement. The windows sounded like they were breaking when you opened them–obviously, somehow off the track. It seems to me that the quality control aspect of their business has fallen significantly, and I’m not going to rent from them in the future.

  6. Aj and RH Bruce says:

    my hubby and I have gone on two trips to Iceland “design your own road trip and go” type of thing! These trips have been wonderful! It is the best way to travel and those little cars have taken us most everywhere on the set trip and a few other places not on the trip (unfortunately the little cars couldn’t go some places and we respected the rules of the roads). Oh the driving, fun, dust and bumpy roads! One of the best parts was somewhere in the north in a fishing town we went to a free place to wash your car, and then it took me a bit to figure out why we and the car stunk like fish! HAHAHAHAH! fish water! My little car was a red one, the 2nd a blue one. Somehow I loved the red one better even though the blue one took us more places (we were there 2 weeks!) . Our little cars took us to places to hike, waterfalls to look at and all sorts of cool places and to meet interesting people and horses. I love the horses! our little cars took us to see trolls and mysterious places, volcanos, ice.

  7. Lavergne says:

    Spent 10 days in Iceland in July 2012… Rented an SUV from GOIceland via the internet before leaving Canada.
    We ended up with a new Nissan Quasi… loved the vehicle, but rental cars are way over priced in Iceland…. 92,500 ISK ($800 CAD) is very expensive for 5 days.., plus $110 CAD to fill the tank.. used 2 tanks of gas, so the full cost of renting a small SUV for $1020 for 5 days is a lot of money… had problems picking up the vehicle… had a taxi take us to the location that was sent to me by internet… when we got there no cars excepted accidented vehicles…no one around,,the Taxi driver was great… he made several phone calls took us to a few other locals…still no GoIceland rentals anywhere to be seen.. the taxi driver turned off his meter and said,,,we are going to solve this,, I wanted him to take us to another car rental,, since I had only made a 10% payment on the rental ..the rest was due at pick-up.. The taxi-driver insisted…saying No..this gives Iceland a bad name .. he made a few more inquiries, but to no avail… suddenly a truck with 2 guys wearing GoIceland jackets on pulled up and asked if they could help… The taxi driver said we are here to get this gentleman’s rental car, but there are none here… GoIceland had emailed me the address of there garage where they repaired their damaged rental cars.., One of the Goiceland employees drove us to the location where we got our vehicle… The taxi-driver was very helpful and very considerate and accommodating,,, true Icelandic hospitality, which we found everywhere we went,,, I am returning to Iceland for sure,,

  8. Ryan says:

    havent read article. just saw fb post. relevant cuz i just made first car rental in iceland after living here 5+ years. rented from Holdur/Europcar in Akureyri. Very pleasantly surprised at personal service, upgrades, efficiency, friendliness and value – price, car and km included were all negotiable with all info out front, no surprises and a feel good ending. Well done says I.

  9. Megan says:

    We hired from Procar in August and although eye-watering compared to what we’d pay in the UK, it was not quite as eye-watering as many of the other companies in Iceland – even those offering older cars. For a 2013 model, decent insurance etc, we paid about £420 for a week. A fair number of other companies were a good £100-£150 more than that. Service was good, and they drove me back to our apartment at the end of the rental.
    I do suggest looking and booking early if you are travelling in summer – car stocks are limited and get booked out fast. I imagine prices are lower out of season, and cars easier to come by.
    The well maintained roads were a pleasure to drive, and fuel prices seemed fairly standard across the board – if it was 147.2kr/litre at one petrol station, it was about the same everywhere else.

    1. mm Auður says:

      I can second that. We rented a car from Procar for our trip around Breiðarfjörður and they were quite reasonably priced for an agency with brand new cars. We had no problems and got a great little car.

      1. Lavergne says:

        That’s really nice to know since I am returning to Iceland in summer of 2014 for a few weeks…rented a car (SUV Nissan QUASI ) through GoIceand in summer of 2012, found the prices very costly…for 5 days it cost $850+ CAD… really liked the vehicle, however had trouble picking it up since they emailed me the address of the garage of where they repaired their damaged cars, rather than the address where we were to pick up our vehicle…but we had a wonderful taxi-driver who was determined to solve our dilemma…( I quote him, “this is bad, we do not want Iceland to get a bad name, we are going to find you your car” ). he turned of his taxi meter after taking us to the street address I had been emailed,,, and drove around looking for Goiceland,,,made several phone calls, and finally uncovered where the pick-up location actually was… we met very friendly, helpful people throughout our wonderful vacation… will definitely check out Procar next summer,, 🙂

  10. Nora Denning says:

    Beware!!!! We rented a car from sad cars in JULY for 2 days, 16th and 17th. We were sent a copy of a parking ticket in the town of Reykjavik in Icelandic with no explanation from AUGUST 17th. Then they went ahead and charged us the payment. We had rented that car the month before but was back in the United States in August. To date they have not reimbursed us. I question they business practices and want to know if I have other places to complain about this.

  11. Aaron says:

    Just thought I would chime in here. Just got back from an 18 day trip in Iceland with three others. We rented a car from Procar for a day to do the Golden Circle. Got a free upgrade on a great car. Later we rented from Bluecar and they are TOP NOTCH! Great service and a new reliable car with excellent tires. Did the Ring Road no problem, including blizzard conditions for hours in the north east. We did see a lot of rough Cheap Jeeps trying to start, held together with half a bucket of screws and metal strapping. Ok for a car person but not for someone who isn’t MacGyver.

  12. rhoda says:


    I’m going to Iceland tomorrow and I need to rent a car. Is a sand, gravel and ash insurance is a must?

    Thanks a lot!

    1. mm Auður says:

      In most cases I would say not but it all depends on where you are going and what you’ll be doing. But in general I wouldn’t think you need it (of course I don’t know your car rental terms though).

      1. Rhoda says:

        Thank you for your quick reply. No specific plans actually..thanks again 🙂

  13. MIchaela says:

    Good day,

    Me and my husband travelled to Iceland for our honeymoon in end of june 2013 for 8 days. We rented a car with the company called since they were the cheapest we could find. We didn’t have high expectation but we got a new car with free GPS (very important in Iceland since not all roads are well marked!), something we did not expect but saved our trip!

    Just few tips of advice, be careful not to cross rivers if you dont know what you are doing and ask locals to guide you where and how is the best way to cross.

    Also, get a 4 wheel drive, some of the gravel roads are tough on small cars. We had a Dacia Duster and it got us everywhere we wanted to go (plus the diesel was relatively cheap). But we did come across some tourists that had problems with their small rental cars, especially in Thorsmork. Last but not least, stay on road and prepare yourself for all kinds of weather!!:)


  14. I rented from Route 1 rental cars and had a great experience! A little more expensive but I’ve never had a rental car agent tell me “if something happens to the car it’s ok, we are more concerned with your safety than anything else.”


  15. rferraz says:

    i’m going in june to iceland and already rent a car in budget iceland for 154eur for 5 days (hyunday i20). when i see here people saying that paid 500, 600, 700 eurs for it…i dont understand…and my rental includes CDW, TP, unlimited mileage, airport surchage, local tax…

  16. Dear Audur. I would just like to point to you our peer2peer car rental site: . We offer the best prices during the high season by offering car directly from owners. It would be nice if you would check us out and see if you would like to mention us in your article.

    Best regards

    1. rferraz says:

      322 eur the best price for 5 days?!!! i rented a hyundai for 154 for june in budget!!!

  17. George says:

    We rented from Blue at the airport in February. Very nice service, reasonable cost. We rented a Dacia Duster and got close to 50 mpg in a vehicle that was a legit 4×4. They are all standard transmissions and it took a bit of getting used to 1st gear basically being for offroad maximum torque and shifting really fast.

    Before we left, he went through the vehicle with me and made sure I had the weather app and the 112 app installed on my smartphone and explained what the 112 app was used for. Little touches like that mean a lot to me.

    When we returned the vehicle, we did a quick check on it and his first question to me was were the people who were there nice to me when I picked up the vehicle. We paid about $600 for the vehicle which didn’t seem that bad and the gas price was offset by the great mileage. For people traveling from the US, the gas is expensive but the mileage you get makes it all balance out.

  18. Inari says:

    Be aware of Europcar. We had a really disappointing rental experience. We took all extra insurances there was available, including sand & ash insurance. A rock hit our windshield nearby the airport and we needed to pay for it though we thought we we were covered from these incidents. Also, with europcars they dont tell u upfront that with most of the cars you are not allowed to drive the most common tourist route, golden circle, you learn this reading the conditions after you are already charged! If you rent a car from the airport, go to hertz or budget, europcar is the worst choice!

    1. mm Auður says:

      I’m sorry to hear you had such a bad experience with them but from the sound of your comment maybe the problem was that they didn’t explain well enough what was covered in the insurance and such. No car rental insurance voids you completely from paying, they just lower your self-risk (I think most insurances have self-risk actually). I always recommend people take the SCDW for example because then they only pay a portion of what they would have to pay if they don’t have it. Secondly you must have been driving somewhere else than to the golden circle because the whole road there is paved and you are certainly allowed to go there in a rental car. Usually the only limitations car rental agencies put on their vehicles is that you can’t drive on F-marked roads and you can’t go to Kjölur or Sprengisandur.

      I have no stakes to defend on behalf of Europcar but I think if you are going to tell people to avoid them the claims must at least be accurate and fair. I recommend people ask about insurances (or skim over the contract) before they sign anything. And use your common sense. If you are driving a Yaris you probably shouldn’t be crossing unbridged rivers for example 🙂

  19. nenden says:

    hey, im nenden from indonesia, any suggest for renting car with driver?

    1. mm Auður says:

      You can hire a taxi driver to drive you around:

  20. Vu says:

    I am doing a long lay over coming in early morning into KEF and flying out late at night. I doubt that any car rental place will be open late. Do you know of any that will allow me to just drop off the car and leave the keys in a safety deposit box?

  21. Jen says:

    I made a reservation in the evening last night using your Budget rental link – great deal! $250 USD for a week, in the middle of next month. I’m seeing the charge show up on my credit card, but have not received a confirmation email. Am I wrong to expect an email? Maybe later today? The amount charged is exactly right, but now I’m a little worried I’ve messed the process up somehow.

    1. mm Auður says:

      You should have got a confirmation e-mail. I suggest you check your junk e-mail folder and it if it is not there you can contact budget and ask for it

      1. Jen says:

        Thank you! Emailed them.

  22. Chloe says:

    Hi Auður
    We just slipped on a snowy road and crashed one side of our bumper and broken the plastic frame of the light of our rented 4wd. I know it’s unusual for me to ask about this. But do you have any idea how much will the ‘normal’ repair cost be? We have all the SCDW, CDW, GP insurance with excess up to 150k. So I just want to have a basic idea what kind of bill we are facing. As our trip is ending in 3 hours and we are on our way to return the car. So I really hope you could offer some idea for us.. Thankssss

    1. mm Auður says:

      I’m sorry, I didn’t see this until now. I can’t say what is normal because it depends on so many factors. Good luck!

  23. joanne says:

    Hi, Do you have any recommendations for camper vans? It seems like a great way to get around Iceland.

  24. Edwin Wong says:

    I am planning to rent a vehicle with 9 seaters in iceland coming June 2017. The website of car rental company said that the vehicle comes without air con. Does it mean we have to wind down our window while travelling? Is there heater inside the vehicle knowing it will be very cold travelling around without heater. Thanks.

    1. mm Auður says:

      1) You don’t need aircon in Iceland.
      2) Your car definitely has a heater


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