How to choose the perfect Iceland car rental company

Traveling through the awe-inspiring and dramatic landscapes of Iceland is not just a journey—it's a once-in-a-lifetime adventure that promises unforgettable sights, from steaming geysers to glittering glaciers and thundering waterfalls. With its remote terrain and lack of extensive public transport options, Iceland is a destination best explored by car. Renting a vehicle unlocks access to the island's most breathtaking corners, giving travelers the independence to create their own schedules and stop wherever inspiration strikes. Choosing the perfect Iceland car rental company can significantly enhance this experience, providing peace of mind, flexibility, and financial predictability. In this guide, we'll walk you through how to select the right rental company, highlight the unique benefits of choosing Zero Car Rental, and offer expert tips tailored for every kind of traveler. For even more reasons, check out why renting a car in Iceland with Zero is the best decision.

Why Choose a Car Rental in Iceland?

From the stunning Golden Circle to the rugged Westfjords, Iceland offers an unparalleled variety of landscapes that beg to be explored. Whether you're on a quest to see the aurora borealis in winter or bask in the midnight sun during summer, having your own rental car ensures you can enjoy every moment on your terms. Renting a car is often more cost-effective than relying on guided tours, especially for families or small groups, and offers unmatched flexibility to travel at your own pace. Given that bus services outside Reykjavik are infrequent and limited, a rental vehicle is practically a necessity.

Zero Car Rental makes this convenience even more accessible with a wide-ranging fleet of well-maintained vehicles, eco-conscious options like electric cars, and a customer-first approach that includes convenient pickup at both Reykjavik and Keflavik Airport. Their local knowledge and tailored services ensure you're well-equipped to handle Iceland's variable driving conditions. For specific tips on navigating your trip from the airport, see their Keflavik Airport car rental guide.

Understanding Your Travel Needs

Before jumping into the booking process, take time to evaluate your trip details and travel preferences. If your stay is brief and you're only planning to visit the capital city and nearby attractions, an economy car may be sufficient. For longer trips, especially around the full Ring Road, you might want a roomier and more powerful vehicle that ensures comfort and performance over extended drives. If you're unsure whether a small car is right for you, check out this guide on economy cars.

Your destination also matters. If you’re venturing into Iceland’s interior or planning to travel along the more remote gravel roads in the Westfjords or Highlands, a 4x4 vehicle is necessary. These are the only types allowed on F-roads, which are rough mountain roads not maintained like the main highways.

Seasonality plays a huge role. Winters bring snow, ice, and limited daylight, making four-wheel drive vehicles with studded tires essential. In summer, you can get by with a standard car, especially if you’re staying on the main roads. Lastly, group size is important. Traveling with multiple people or large amounts of luggage means you’ll need extra space.

Zero Car Rental makes the selection process easier with filtering tools that help you match your trip requirements to the right vehicle. Their support team is available to help you choose if you're unsure, which is a great resource especially for first-time visitors. For more advice, see their tips for first-time renters.

Types of Vehicles Available

Icelandic rental companies offer a diverse selection of vehicles to suit every traveler’s needs. If you're looking to keep costs down, economy cars are the most budget-friendly choice and work well for city driving and short excursions. For those planning extensive road trips or venturing off the beaten path, 4x4 SUVs are ideal—they offer higher ground clearance, better traction, and access to F-roads. Travelers seeking a bit more luxury can opt for high-end vehicles with premium features, while adventure-seekers may find campers or motorhomes appealing since they combine transport and lodging in one.

Zero Car Rental stands out by offering all of these vehicle types, including eco-conscious options like hybrid and electric cars. Their fleet includes rugged SUVs for highland routes, compact cars for Reykjavik excursions, and even campers for those who wish to experience Iceland under the stars. Their site makes comparing and booking easy, and their vehicles come fully equipped to handle Iceland’s diverse terrain.

Top Features to Look for in Rental Companies

Several factors distinguish a great rental company from an average one. First, the condition of the fleet is crucial—newer models mean fewer breakdowns and better fuel efficiency. Transparent pricing is also vital; avoid companies that surprise you with hidden fees upon return. Having 24/7 customer support is important in a country like Iceland, where road conditions can change rapidly and remote areas may have limited assistance.

Insurance options are another key consideration. A comprehensive plan protects you from unexpected costs related to weather or gravel damage, which is common in Iceland. Additional perks such as free GPS, extra drivers, Wi-Fi, or child seats can make a real difference in your comfort and budget.

Zero Car Rental excels in all these areas. They provide a modern and diverse fleet, straightforward rental agreements with no hidden fees, and around-the-clock support. Their packages often include extras at no additional cost, and their insurance options are clearly outlined, making the booking process transparent and stress-free. Their reputation for honesty and quality service makes them one of the top car rental companies in Iceland. Learn more in their ultimate guide to car rental in Iceland.

Comparing Costs and Avoiding Hidden Fees

The average price of renting a car in Iceland varies based on the season, vehicle type, and duration of your trip. In summer, daily rates for a basic economy car start around $50–$70, while 4x4 SUVs range from $90–$150 per day. Prices are often lower in winter and shoulder seasons. However, be cautious—some rental companies advertise low base prices but tack on hidden fees for essentials like insurance, mileage, or GPS rentals. Zero Car Rental, in contrast, is known for their all-inclusive pricing model. Their transparency allows travelers to budget with confidence and avoid surprise charges, making them an affordable and trustworthy choice.

You can also check out their excellent advice on how to save money on your Iceland car rental, which is particularly useful if you're traveling on a budget or planning a longer trip. For those new to Iceland, avoid common mistakes by reviewing their guide on classic car rental mistakes and how to dodge them.

Rental Requirements and International Licenses

To rent a car in Iceland, drivers must typically be at least 20 years old, though some vehicles require a minimum age of 23. You’ll need a valid driver's license held for at least one year. Most rental agencies, including Zero, accept foreign licenses provided they use the Roman alphabet. If your license is not in Roman characters, you will need an international driving permit. Always bring a credit card in the name of the primary driver to cover the security deposit.

Navigating Icelandic Roads and Laws

Driving in Iceland is relatively straightforward, but it comes with its own set of rules and conditions. Always drive on the right-hand side of the road, and keep your headlights on at all times, regardless of the season or weather. Speed limits are strictly enforced, with fines issued via camera in both urban and rural zones. Most paved roads have a limit of 90 km/h, gravel roads 80 km/h, and city areas 50 km/h. Off-road driving is illegal and punishable by hefty fines, as it damages delicate ecosystems. Zero Car Rental provides all customers with detailed driving guides and safety tips, helping even first-time visitors feel confident behind the wheel.

Still unsure if car rental is for you? The team at Zero answers that directly in their article on why renting a car in Iceland is a top question, and they back it up with resources like the ultimate guide for international travelers.

Insurance Coverage Options

Purchasing additional insurance is highly recommended in Iceland due to unique hazards like flying gravel, volcanic ash, and sudden weather changes. While many companies offer several insurance tiers, from basic Collision Damage Waiver (CDW) to full coverage plans that include Gravel Protection, Sand and Ash Protection, and even Theft Protection. While not mandatory, these add-ons significantly reduce out-of-pocket expenses in the event of damage and provide peace of mind for travellers navigating Iceland’s challenging conditions. In the case of Zero Car rental, we have simplified this journey for you, adding all the insurances possible into the price, with Zero deductible and gone beyond, by adding roadside assistance, also with zero deductible. This is the best deal in the market in Iceland. Hands down!

Pickup, Drop-off, and Vehicle Choice

The process of picking up and dropping off a rental car in Iceland is simple and efficient, especially with companies like Zero. You can pick up your vehicle directly at Keflavik International Airport or have it delivered to your hotel or Airbnb. The return process is equally smooth, with drop-off instructions clearly explained during check-in. Additionally, you can request a specific make or model when booking through Zero’s platform. If you’re looking for extra storage, roof racks, or studded winter tires, these can be added to your reservation as well.

Regional Driving Restrictions and Destinations

While most of Iceland is accessible with standard vehicles, certain areas have restrictions. F-roads in the Highlands are only open in summer and require a 4x4. Many of these routes are unpaved, contain river crossings, and are off-limits to non-4WD vehicles. Zero Car Rental helps travelers plan their routes by advising on appropriate vehicle types for different regions. Popular destinations like the Golden Circle, South Coast, Snæfellsnes Peninsula, and Akureyri are all accessible by most vehicle types.

Seasonal Tips and Promotions

Driving in Iceland varies greatly by season. In winter, snowstorms and icy roads are common, so plan ahead and allow extra travel time. Summer offers near-constant daylight and generally easier driving conditions. In autumn and spring, road conditions can shift rapidly, especially in the north and interior. Zero Car Rental provides real-time road condition updates and equips vehicles appropriately for the season.

Another critical aspect often overlooked is roadside assistance—something you’ll definitely want on your side in Iceland. Zero strongly recommends reading their post on why you should always get roadside assistance, which explains how it can save you both time and money in the event of trouble.

The company also frequently runs seasonal discounts and early booking promotions, making it easy to save on your rental. Signing up for their newsletter or booking directly through their website is the best way to access these deals.

Final Thoughts

Choosing the perfect car rental company in Iceland is more than just comparing prices—it’s about finding a partner for your journey. Zero Car Rental leads the pack by combining affordability, transparency, and top-tier customer service. Whether you're a solo traveler or part of a group, their extensive vehicle options, expert guidance, and customer-first philosophy ensure a smooth and memorable Icelandic road trip experience.

With the right rental, you’ll have the freedom to chase waterfalls, wander volcanic beaches, and marvel at geysers on your own schedule. Wherever the road takes you, make sure you travel with confidence—and Zero.