Best Rental Car for Iceland? Tips to select ideal vehicle for you! 2025

Renting the right car can make or break your Icelandic adventure. With its diverse landscapes, from glaciers and volcanoes to rugged coastlines and gravel roads, Iceland demands careful consideration when selecting your rental vehicle. Here’s a guide to the best types of cars for different trip plans to ensure you travel in comfort, safety, and style.

If your itinerary revolves around Reykjavik and nearby areas, a compact car is a perfect choice. These vehicles are affordable, fuel-efficient, and easy to park in the city. They’re ideal for exploring attractions like the Blue Lagoon, the Golden Circle, or the Reykjanes Peninsula.

While compact cars can handle well-paved roads, they’re not suitable for off-road driving or Iceland’s F-roads. Stick to popular tourist routes, which are well-maintained year-round. Examples include the Toyota Yaris or Volkswagen Polo, both offering reliable performance and comfort.

For budget-conscious travelers, compact cars are an economical option without compromising convenience. Just ensure your rental includes insurance, as Iceland’s unpredictable weather can sometimes lead to minor road hazards.

Planning to drive Iceland’s famous Ring Road (Route 1)? An SUV is your best bet. This scenic 1,332-kilometer route encircles the entire country, passing waterfalls, black-sand beaches, and glaciers. An SUV provides the comfort and space needed for a long road trip, especially if you’re traveling with family or friends.

SUVs are versatile, capable of handling paved roads as well as gravel paths to lesser-known attractions. Popular models like the Hyundai Tucson or Toyota RAV4 come with spacious interiors and all-wheel drive, making them great for Iceland’s varied terrain and unpredictable weather.

Many SUVs also come with modern features like heated seats, essential for chilly mornings, and advanced navigation systems to keep you on track. Opting for an SUV will ensure you’re ready for both comfort and adventure.

If your dream is to explore Iceland’s remote Highlands, a 4×4 vehicle is non-negotiable. The Highlands are crisscrossed by F-roads, rugged mountain trails that often require river crossings and are only accessible in summer. Renting a 4×4 like a Jeep Wrangler or Toyota Land Cruiser ensures safety and compliance with Icelandic driving laws.

The 4×4’s raised suspension and off-road capabilities allow you to reach stunning destinations like Landmannalaugar, Thorsmork, or Askja. These areas are known for their breathtaking landscapes but can be challenging for standard vehicles.

However, driving in the Highlands demands caution. Always check weather conditions, road closures, and river depths before setting out. A 4×4 will give you the confidence to tackle Iceland’s wildest terrains responsibly.

If your dream is to explore Iceland’s remote Highlands, a 4×4 vehicle is non-negotiable. The Highlands are crisscrossed by F-roads, rugged mountain trails that often require river crossings and are only accessible in summer. Renting a 4×4 like a Jeep Wrangler or Toyota Land Cruiser ensures safety and compliance with Icelandic driving laws.

The 4×4’s raised suspension and off-road capabilities allow you to reach stunning destinations like Landmannalaugar, Thorsmork, or Askja. These areas are known for their breathtaking landscapes but can be challenging for standard vehicles.

However, driving in the Highlands demands caution. Always check weather conditions, road closures, and river depths before setting out. A 4×4 will give you the confidence to tackle Iceland’s wildest terrains responsibly.

If sustainability is a priority, consider renting an electric car. Iceland’s abundant renewable energy sources make it one of the most eco-friendly countries for electric vehicle (EV) travel. With an increasing number of charging stations, especially around Reykjavik and the Ring Road, EVs like the Tesla Model 3 or Nissan Leaf are becoming a practical choice.

Electric cars are best suited for shorter trips or those staying on well-paved routes, as charging infrastructure is still developing in remote areas. They offer the added benefit of quiet operation, enhancing your experience of Iceland’s tranquil landscapes.

By choosing an electric car, you’ll reduce your carbon footprint while exploring one of the world’s most beautiful destinations. Be sure to plan your charging stops in advance to avoid disruptions, especially in rural areas.