Renting a car in Iceland: what to check before you book

The checklist at a glance

Use these questions to compare any car rental in Iceland. The last column shows how Ring Road Cars handles each one; the sections below explain why each check matters in Iceland.

The full price for your dates

A day rate is only part of the price. Iceland charges a kilometer fee on vehicles, and licensed rental companies can pay it as an official daily fee: ISK 1,390 per started rental day in 2026, based on an estimated 200 km a day, which settles the fee however far the car is driven (Ísland.is). Cover, extra drivers, child seats and the way you pay can add more.

Ask: for the total for your dates with the cover you want, the road-use charge and the extras you need, and whether paying later costs more.

At Ring Road Cars: every day rate includes BASIC + SCDW cover (excess €1,000) and unlimited mileage. The road-use charge, €12 per started rental day from 1 January 2027 (€10.50 in 2026), is shown next to every price and added as its own line in every quote (the kilometer fee explained). Paying now costs the listed price; paying on arrival costs 4% more on the rental, cover and extras, not on the road-use charge.

Costs that are not ours: the fuel you use, and tolls and parking on your route (Tolls & parking). Our fee schedule, from the rental terms, is on Fees & charges.

The excess and the card hold

The excess is the most you pay per incident for damage your cover includes. The card hold reserves an amount on your card at pickup, which uses part of your credit limit or, on a debit card, your account balance. Both depend on the cover option, so compare them option by option.

Ask: for the excess and the hold with each cover option, whether the hold is a charge or a deposit, and when it is released.

The hold is not a charge or a deposit: we release it after the return, and your card issuer decides how soon the amount is available again (rental terms 7). Declining CDW does not lower the price and is advisable only if your own card or travel insurance covers rental cars in Iceland (rental terms 35). What each option includes: Cover & extras.

What no cover option pays for

Cover options have exclusions, and in Iceland they matter: Safetravel warns that no insurance covers damage to a vehicle while it crosses a river (Safetravel), and off-road driving is prohibited by law (Ísland.is).

Ask: for the exclusions before you book, and whether river crossings, the undercarriage, wheels and tires, and windblown sand and ash are among them.

At Ring Road Cars, no cover option, MAX included, pays for damage (rental terms 36):

• caused on purpose or by gross negligence, by a driver under the influence or unfit to drive, or in racing or driver training;
• involving animals, or to the interior;
• only to wheels, tires, suspension, batteries, the windshield, roof or radios, except what Tire and Windshield Protection covers and, with MAX, wheels and tires;
• to the undercarriage, or to the drivetrain, engine or chassis from rough roads or stones;
• from driving where it isn't permitted, from rivers and other water, or from water getting into the car;
• from windblown sand, gravel, ash or earth, except sand and ash damage that Sand and Ash Protection or MAX covers;
• on ferries, by an unauthorized driver, to the clutch or gearbox, or from the wrong fuel.

Damage like this is charged in full. For undercarriage or water damage, or sand and ash damage without Sand and Ash Protection or MAX, we may place a hold of up to €10,000 on your card after the return inspection and release any part not needed (rental terms 7). The damage administration fee of €150 applies each time damage is charged, with every cover option.

Gravel, sand and ash, and roadside help

Iceland's Road and Coastal Administration notes that gravel roads are common off the most popular routes, that the speed limit on them is 80 km/h, and that small stones kicked up on gravel can damage a windshield (Vegagerðin). Wind matters too: check the Icelandic Met Office's warnings before you drive (vedur.is).

Ask: whether a damaged windshield, a damaged tire and damage from windblown sand and ash are covered, at what excess and on what conditions; and, after a breakdown, who you call and who pays for the call-out and the tow.

At Ring Road Cars:

• Tire and Windshield Protection (TWP), €20 a day, gives the cover of PLUS: at no excess, the replacement part — a tire when only the tire is damaged, or the front windshield when gravel from another vehicle damages it. Not wheel rims, fitting or other labor.
• Sand and Ash Protection (SAP), €15 a day: at no excess, all damage from sandstorms, erosion and ash, except in an area under an orange or red wind warning from the Icelandic Met Office.
• MAX, €40 a day, includes both, lowers your excess to €0 and also covers wheels and tires.
• Breakdowns: call +354 779 9499, day or night, before you arrange any repair. If the car breaks down through no fault of yours, help is free, including a tow and a replacement car as soon as reasonably possible.
• Roadside Assistance Protection (RAP), €10 per started rental day, waives call-out, labor and towing for a flat battery, a tire puncture or a lock-out in an emergency (how it works).

The card you pay with

Every rental needs a card for the hold, and card rules differ between rental companies. A card that doesn't meet them can cost you the car at the desk, so check them before you book, especially if you use a debit card.

Ask: whether debit cards are accepted, whether the card must be physical and in the renter's name, and whether paying by card costs extra.

At Ring Road Cars: a physical credit or debit card in the renter's name, showing the number and expiry date and valid for 90 days after the rental, from Visa, Mastercard, American Express, China UnionPay, Discover or Diners Club. Apple Pay and Google Pay are fine for paying, but bring the physical card. Prepaid, purchasing, anonymous and virtual cards are not accepted, and neither is JCB. There is no card surcharge. Without a qualifying card we may refuse the car as a no-show (rental terms 7). More: Renting with a debit card.

Drivers: age, license and extra drivers

Iceland recognizes driving licenses from EEA countries, and licenses from other countries for 6 months (Icelandic Transport Authority). Rental companies add their own rules on age, on how long you have held your license and on who may drive.

Ask: for the minimum age for the car you want, any young driver fee, how long you must have held your license, and what each extra driver costs.

At Ring Road Cars: every driver must be at least 20. For SUVs, 4×4s and vans — the Comfort, 4×4 Adventure, Highland 4×4 and Family & Space categories — the minimum is 25, but we may, at our discretion, let drivers aged 20–24 rent them for a young driver fee of €15 a day. There is no maximum age. Every driver shows a physical license held for at least one year; a license not in the Latin alphabet also needs an International Driving Permit or an approved translation. Each additional driver costs €10 a day, and only drivers named on the rental agreement may drive. More: What you need to rent.

Pickup and return: where, when and one-way

Where the car is handed over and the opening hours decide how you get from the terminal to the car, and whether an early or late flight costs extra.

Ask: where exactly you collect and return the car, the opening hours, what an out-of-hours pickup or return costs, what happens if your flight is delayed, and what a one-way rental costs.

At Ring Road Cars:

• Pickup and return are at our office (Bogatröð 1, 262 Reykjanesbær), about 10 minutes from Keflavík Airport (KEF) by our free shuttle (Airport shuttle). Give us your arrival flight number when you book.
• We are open 04:00–18:00 every day; on 24 and 31 December, 04:00–12:00; closed on 25 December and 1 January, with no pickups or returns (Opening hours).
• Outside opening hours, pickup or return at the airport is on request, agreed in advance, at €75 each, shuttle included (€150 after 12:00 on 24 and 31 December).
• Collect the car within two hours of the booked time; if your flight is delayed, tell us and we will try to hold it, but we cannot promise to. A return more than one hour after the end of a rental day may be charged an extra day.
• One-way and delivery: on request only (Reykjavík included), agreed in advance and priced individually.

Mileage, winter tires and where you may drive

Distances add up: the Ring Road alone is about 1,310 km (Vegagerðin). For winter driving, Safetravel advises making sure your rental car has winter equipment such as winter tires (Safetravel). Highland F-roads are usually closed from mid-September until June or July, not every four-wheel-drive car suits them, and off-road driving is strictly forbidden (Safetravel).

Ask: whether mileage is unlimited, which dates the winter tires cover, and which roads the car may use, F-roads especially.

At Ring Road Cars:

• Mileage is unlimited on every booking made on this website.
• Winter tires are on every car from 1 November to 14 April. From November to March we strongly recommend an AWD or 4×4 car (winter car rental).
• F-roads, Kjölur (road 35 north of Gullfoss), Kaldidalur (550), Öxi (939) and roads 586 and 864 are allowed only in a four-wheel-drive car (Comfort, 4×4 Adventure or Highland 4×4) that your booking confirms as F-road approved, only when officially open, and never on the F-roads the rental terms exclude. Everyday and Family & Space cars are two-wheel drive and may not use them (F-roads and rental cars).
• Off-road driving is illegal and carries a €1,000 fee, as does driving on a prohibited road, and no cover applies to the resulting damage. Check which roads are open on umferdin.is.

The fuel policy

The fuel policy decides what you pay if the tank isn't full when you return the car, so check how missing fuel is priced. How paying at the pump works in Iceland: Fuel & paying at the pump.

Ask: whether the policy is full to full, how missing fuel is priced, and whether a refueling fee is added.

At Ring Road Cars: full to full. Refuel within 5 km of the return location; a plug-in hybrid need not be returned charged. Missing fuel is measured in eighths of a tank, a part eighth counting as one, and charged at the price per liter N1 publishes for its station at Flugvellir 27, Reykjanesbær, on the day we refuel the car, plus a refueling fee of €30 (rental terms 40(j)).

The handover and the damage process

What is recorded at pickup decides whether a mark found at the return counts as new, so the handover matters as much as the cover. Find out how damage is documented and charged before you need to know.

Ask: whether you check the car together at pickup, whether you get photos or video, how and when you are told about new damage, how it is priced, and whether you can ask for an independent assessment.

At Ring Road Cars:

1. At pickup we check the car with you and record existing damage in the Vehicle Condition Report, which you sign and keep a copy of. We photograph the car, record a 360° video and send them to you; you may take your own photos too.
2. Damage not recorded then is presumed to have happened during the rental, unless you show otherwise.
3. New damage is charged at the actual repair cost, on an invoice or an itemized repair-shop estimate, never above our price list for listed items and, where your cover applies, up to your excess, plus the damage administration fee of €150.
4. We email you notice with photos within 10 days of the return and charge nothing until 20 days after it, apart from a hold, unless you agree in writing.
5. Within 20 days of the notice you can ask in writing for an independent assessment by a repair shop using the Cabas system; its result binds us. More: How damage works.

Cancellation and changes

Plans can change in Iceland: in winter, storms can close roads without warning (Vegagerðin), and Safetravel advises being ready to change or cancel travel plans if conditions become unsafe (Safetravel).

Ask: until when you can cancel for a full refund, whether a lower rate is non-refundable, and what a change costs.

At Ring Road Cars: if you pay now, you get a full refund when you cancel by email at least 48 hours before the booked pickup time; paying on arrival costs 4% more on the rental, cover and extras, with the same 48-hour rule. We sell no non-refundable rates on this website. A later cancellation or a no-show is not refunded, and a pay-later booking may be charged the same; the road-use charge is refunded for a canceled or uncollected booking. A change costs €10 and reprices the booking at the current rates (rental terms 8; Cancellation policy).

Questions about renting a car in Iceland