Choosing the right rental car in Iceland: A complete guide

Iceland’s spectacular landscapes offer everything from smooth highways to rugged mountain tracks. Having the right rental car can make or break your adventure. The vehicle you choose determines where you can go, how safe you’ll feel on changing terrain, and even how much fun you’ll have. In this guide, we’ll walk through how to pick the perfect car for your Iceland trip – whether you’re cruising the Ring Road in summer or venturing into winter snows – and highlight why Zero Car Rental ensures a zero-hassle, maximum-fun experience for travellers.

2WD or 4x4? Matching Your Car to Your Iceland Itinerary

One of the first questions to ask is: Do you need a 4x4 in Iceland, or will a 2WD car do? The answer depends entirely on your travel plans. If you plan to stick to well-paved routes – say exploring Reykjavík, the popular Golden Circle, and the main Ring Road (Route 1) – a normal 2WD car is perfectly suitable. Roads to major attractions are paved and well-maintained, so a small economy car or compact sedan can comfortably get you around. In fact, choosing a smaller car can save you money on rental rates and fuel, which is great if you’re watching your budget.

However, Iceland’s wild interior and some rural areas demand a 4x4. The mountainous highland roads marked with an “F” (F-roads) are legally off-limits to standard 2WD vehicles – these rough trails have steep hills, loose gravel, even unbridged river crossings, and rental companies prohibit taking regular cars on them. If your itinerary includes spots like Landmannalaugar, Þórsmörk, Askja, or other Highland gems, you must rent a 4x4 with good ground clearance. Not only is it required by law to tackle F-roads with a four-wheel-drive, but doing otherwise could void your insurance coverage in case of an accident. Even on some non-F gravel routes (e.g. in the remote Westfjords or rough backroads), a 4WD or AWD vehicle will offer better traction and safety.

In short, match your car to where you’re going:

• City & Paved Attractions: 2WD economy car is just fine (ideal for the Ring Road in summer, Golden Circle, South Coast main sites).
• Mixed Gravel & Rural Areas: A compact SUV or crossover (AWD) gives more comfort on gravel roads and in bad weather, even if F-roads aren’t on your plan.
• Highlands & F-Roads: A true 4×4 vehicle is mandatory. Think midsize or large SUV with high clearance (like a Toyota Land Cruiser or Jeep) if you’ll ford rivers and tackle mountain tracks.
• Max Adventure Anywhere: If unsure, err on the side of a 4x4 – it provides extra safety and lets you adapt if Mother Nature throws a curveball.

Keep in mind that bigger isn’t always better for every trip. If you won’t go off asphalt, a smaller car not only costs less but also saves fuel. On the other hand, if your dream spots lie at the end of a rocky trail, you’ll thank yourself for getting a capable 4x4. It’s all about finding the right fit for your route.

Pro Tip: Our team at Zero makes this easy – during booking we clearly indicate which vehicles are allowed on F-roads and which are not. This way you won’t accidentally pick a car that can’t legally (or safely) take you where you want to go!

Summer vs. Winter: Seasonal Considerations

Iceland’s driving conditions swing dramatically between summer and winter, and so should your car choice. In summer (June–August), nearly all roads are open and the midnightsun lights your way. If you’re visiting in summer and sticking to mainstream areas, you can rent pretty much any car confidently. A compact 2WD will handle the Ring Road in July just fine. That said, summer is peak tourist season, so book your car well in advance to ensure you get the type you want (rental demand is very high in summer months).

Winter (November–March) is a different beast. Icelandic winter brings snow, ice, strong winds, and very limited daylight. If you’re traveling in winter, it’s highly recommended to rent a 4x4 with winter tires for better traction. Even main roads can be icy or get snowed over in a sudden storm. A four-wheel-drive (ideally an SUV) will give you stability and grip when navigating snowy streets in Reykjavík or driving out to see frozen waterfalls. Studded winter tires are a must in icy conditions – fortunately, all Zero Car winter rentals come equipped with proper tires for the season. Also consider a vehicle with heated features (seats, steering wheel) for comfort, as well as enough space to store bulky winter gear (parkas, boots, etc.).

If you’re visiting in spring or fall (the “shoulder seasons”), you may encounter a mix of conditions. Late fall and early spring can still bring snow in the north or high elevations, so a 4x4 is wise if your April or October trip includes those areas. In May or September, weather is milder and most roads (except the highland F-roads) are usually open – a 2WD could suffice if you stay flexible and check forecasts.

No matter the season, always monitor the weather and road conditions. Iceland’s weather can change fast year-round. Check the Icelandic Road Authority (road.is) and SafeTravel alerts before long drives, especially in winter. As part of our service, Zero provides live updates and even pushes storm alerts to some of our connected cars’ dashboards, so you’re never caught off guard by a sudden gale or snowstorm.

Group Size and Luggage: How Much Space Do You Need?

Another key factor in choosing the right car is your travel group size and baggage. Think about comfort on those long drives and how much luggage you’ll have. If you’re a solo traveller or couple with just a couple of bags, a small sedan or hatchback will be cozy and efficient. But if you’re a family of five or a group of friends with camping gear, you’ll need something larger.

When comparing vehicle options, consider both passenger seating and cargo capacity. For example, a compact car might seat 4 people, but will it fit 4 large suitcases? Probably not. In such cases, sizing up to a station wagon or SUV is smart. SUVs and crossovers are popular in Iceland for good reason: they offer higher ground clearance and lots of cargo room without being as bulky as a full van. If you have 4 adults plus luggage, a midsize SUV (like a Kia Sportage or Toyota RAV4) strikes a good balance – everyone gets a seat and you can stash bags in the back.

For larger parties or special needs, there are minivans and 7-9 seater vehicles available as well. These are great for big families or tour groups traveling together. Just remember that bigger vehicles mean higher fuel consumption. Carpooling with a larger vehicle can still be cost-effective when splitting costs, and it might save you from having to rent two separate cars. As noted in our 4x4 tips, sometimes a single 4x4 can replace multiple tour bookings – for instance, renting a 7-passenger 4WD van could allow your whole group to venture into the Highlands together, avoiding the need for expensive guided super-jeep tours.

Lastly, consider your comfort preferences. If you’re tall, you might prefer a car with ample legroom. If you plan on car camping or napping in the car, maybe a roomy SUV you can fold seats down in. Zero’s fleet spans from economical city cars to spacious SUVs and even electric vehicles – so there’s something to suit every group size and travel style. And if you’re unsure, feel free to reach out to us with your headcount and itinerary, and we’ll happily recommend an optimal car category.

Fuel Economy vs. Power: Keeping Costs and Environment in Mind

Fuel in Iceland is not cheap (expect European-level fuel prices), so it pays to choose a vehicle that’s efficient for your needs. A major part of “the right car” is one that won’t guzzle gas unnecessarily. If you’re planning to drive long distances around the island, a smaller engine or a hybrid can save a lot on fuel costs. For example, if your route is mainly paved and you don’t need a heavy 4x4, renting an economy car can give you 50+ miles per gallon (or ~5 L/100km) instead of, say, an SUV’s 25 MPG (10 L/100km). Over a week of touring, that difference adds up at the pump.

On the other hand, don’t go too small if it compromises safety or comfort. Straining a tiny car over mountains with four people and luggage can hurt its fuel economy and your experience. It’s about balance – right-sizing the car. Often a compact crossover (small SUV) provides better efficiency than a big truck-like SUV, while still giving you some power and clearance. Vehicles like the Dacia Duster 4×4 are known to be both fuel-efficient and capable on gravel, making them a popular choice for Iceland road trips.

Electric and Hybrid Cars: Iceland is rapidly embracing electric vehicles (EVs), with more charging stations popping up even in remote areas. If you’re environmentally conscious, you’ll be happy to hear Zero offers electric and hybrid models in our fleet. Driving an EV in Iceland is a unique experience – nearly all of Iceland’s electricity is from renewable sources, so you’re road-tripping with a zero carbon footprint. Ranges on modern EVs are improving, but you do need to plan charging stops (especially in winter when range drops). We help by providing maps of charging stations (even off-grid ones), so “range anxiety” won’t spoil your trip. If an EV suits your itinerary (say, mostly within the Southwest or Ring Road where chargers are common), it can be a fantastic way to travel green. For longer expeditions with less infrastructure, a hybrid might be a safer bet so you have gasoline backup. Either way, if eco-travel is your style, ask us about available green vehicles and charging support.

Picking Up at KEF Airport vs. Reykjavík City

Most international travelers land at Keflavík International Airport (KEF), about 45 minutes outside Reykjavík. 

Naturally, picking up your rental car right at the airport is the easiest way to start your journey. Zero Car Rental makes this super convenient with our self-service pickup at KEF. There’s no waiting in line at a rental counter – instead, once you’ve booked with us, you do an online check-in and then retrieve your car key from a secure keybox at our KEF location. Even if you arrive at 2 AM, this 24/7 keybox system means you can grab your keys and be on your way immediately. We often say our process is “Land, Grab, Drive” for a reason – you literally land, grab your keys, and drive off to explore! (For a detailed walkthrough of how the KEF pickup works, see our Ultimate Guide to Keflavík Airport: Land, Grab, Drive.)

Now, what if you’re not immediately leaving from the airport? Some visitors plan to spend a couple of days in Reykjavík first, then rent a car. Or maybe you’re arriving by cruise ship to Reykjavík’s port. In these cases, you might prefer to pick up your car in the Reykjavík city office. Zero Car offers that too – we have a convenient downtown pickup location with the same keybox system for after-hours. It’s a quick taxi ride from most hotels. The process is just as seamless as at KEF, and you avoid paying for a rental on the days you’re just enjoying the city on foot. In fact, savvy travelers sometimes plan it this way: stay in the city upon arrival (skip the car for those days), then pick up the rental in town when you’re ready to hit the road. This can save you a day or two of rental fees and parking hassles. Our Reykjavik office keybox works 24/7 as well, so it’s all about what fits your schedule.

Which to choose? If you’re eager to begin a countryside road trip the moment you land at KEF, airport pickup is ideal (and free shuttle buses take you straight to the rental lot). If your itinerary has you exploring the capital first or arriving via Reykjavik, downtown pickup might be more convenient. The good news is Zero Car supports both, with no extra hassle either way. Just let us know your preferred pickup location when booking. We’re one of the few companies offering no-wait self-service at both KEF and Reykjavík, so you get total flexibility.

Why Choose Zero? – The Zero Car rental difference

By now you have a sense of how to pick the right car type for your travels. The final piece of the puzzle is choosing the right rental company. As you plan your trip, you’ll notice you have many options – from big international brands to local Icelandic agencies. We humbly believe going with a local company like Zero is the best decision you can make for a stress-free adventure. Here’s why:

All-Inclusive Pricing, No Hidden Fees: With many large rental companies, that “cheap” base rate can skyrocket once you add necessary insurance, extra driver fees, mileage fees, etc. Zero operates differently – our daily rate already includes full insurance coverage with zero excess, unlimited mileage, and 24/7 roadside assistance. There’s no security deposit held on your card either. The price you see is the price you pay, period. This transparent pricing means you won’t get nasty surprises on your credit card bill weeks after the trip. As our name implies, we’ve eliminated the nonsense: zero hidden fees, zero hassle.

Zero Wait, Zero Paperwork: We described the keybox pickup – this is a game changer for weary travelers. You skip the rental counter entirely. No queues, no stacks of forms to fill out upon arrival. Just grab your keys and go. Returns are just as easy (drop the key in the box and you’re done). After a long flight, this convenience is priceless. Even during peak travel season when other rental lines are an hour long, you’ll already be on the road, perhaps already gazing at your first waterfall.

Local Expertise and Support: When you rent with Zero, you’re getting a local team that knows Iceland inside and out. Our customer support isn’t some overseas call center; it’s a team right here in Reykjavík who can give real-time advice on weather and routes. Stuck in a snow drift or unsure if a river is safe to cross? We’re a phone call away, and we understand the situation on the ground. This kind of responsive, knowledgeable support is something global corporations just can’t match. We also hand-pick a fleet suited for Iceland – you won’t find low-clearance city-only cars in our lineup because we know even regular tourists often end up on gravel or face strong winds. Our cars come with features like studded winter tires, free GPS or Wi-Fi, and other perks tailored for Iceland driving.

Full Insurance = Peace of Mind: Driving in Iceland is stunning but can be unpredictable – gravel can chip your paint, winds can knock a car door, ash storms can scratch windshields. Rather than scare you with all the insurance options like some companies do, we include the highest level of protection automatically. That means you have zero excess (deductible) if something happens. You won’t be fighting over damage charges or paying extra for sand and ash protection – it’s already in your contract. Knowing you’re completely covered lets you relax and enjoy the drive, which is what a vacation is all about!

Trusted by Travelers: As a local business, our reputation is everything. We’re proud to have earned the trust of travelers from around the world – many of our customers have left glowing 5-star reviews that you can read on our site. They often mention the ease, honesty, and friendly service they experienced. We don’t have a global brand name to lean on; we prove ourselves with each rental. That means going the extra mile to make sure you have an amazing trip.

In short, Zero Car Rental tries to take all the friction out of the car rental process, so that renting the right car isn’t a chore or a stress point in your Iceland plans. We’ve built our service around the needs of travellers just like you – folks who want to experience Iceland’s beauty their own way, without tour buses and tight schedules. By providing the right cars (for all roads and seasons) and backing it up with zero-fuss service, we enable you to unlock Iceland with confidence. As one of our blogs says, “Why renting a car in Iceland with Zero is the best decision” – our goal is to make sure you feel that way at the end of your journey!

Final Thoughts

Choosing the right rental car in Iceland comes down to understanding your adventure. Are you chasing northern lights in winter or midnight sun in summer? Sticking to the classics or roaming into the wild highlands? Once you match your vehicle to your plans, everything clicks into place – you’ll have the freedom to go where you want, when you want, safely and comfortably.

And remember, the company you rent from matters just as much. With a local, customer-first company like Zero, you’re not just getting a car – you’re getting a reliable travel partner. We want your Iceland road trip to be the highlight of your life, so we take care of the logistics while you focus on the wow moments. From landing at KEF to dropping off the keys, we aim to deliver zero hassle and maximum fun every mile of the way.

So, gear up for the journey of a lifetime! Whether it’s your first visit or a return expedition, Iceland has new wonders waiting around every bend in the road. With the right set of wheels and the right support team behind you, there’s truly no limit to where you can go. Happy driving, and see you on the road in Iceland!