Best car rentals in Iceland: Comprehensive guide

Iceland is one of those magical places where the journey matters just as much as the destination. It’s where waterfalls appear around random corners, glaciers rise in the distance, and a quiet black sand beach might be just a short detour away. But, public transport in Iceland is limited outside Reykjavík, and many of the country’s beautiful places are far from bus routes. And that’s exactly why renting a car in Iceland makes so much sense. If you want to explore the famous Ring Road, chase waterfalls, or drive through dramatic landscapes, having your own car gives you that freedom.  

In this guide, we’ll walk you through the best car rental in Iceland, including trusted local companies and global brands that travelers rely on.

Which are the best car rental companies in Iceland?

Iceland’s car rental market includes both international brands and locally owned companies, giving travelers a range of options depending on their budget, vehicle preferences, and pickup locations.

Most rental offices are located around Keflavík International Airport or in Reykjavík, making it easy to pick up your car right after landing.

So without further ado, below are seven reliable companies travelers usually choose for the best car rental in Iceland.

1. Blue Car Rental

Blue Car Rental was founded in 2010 and has grown into one of the largest locally owned car rental companies in Iceland. The company focuses on providing reliable vehicles and a smooth rental experience for travelers exploring the country. With a modern fleet of vehicles, and a large team supporting operations, Blue Car Rental emphasizes safety, transparency, and customer service. The company also aims to simplify the rental process through digital tools.

Where are the company offices located?

Blue Car Rental has offices in Reykjavík and at Keflavík International Airport. This makes it easy for visitors to pick up their rental car soon after landing.

Can you rent a car online or only in person?

You can reserve a vehicle online through the company’s website before arriving in Iceland. The rental process can be completed digitally through online check-in and smart device access. 

Does the company offer additional services?

• Online check-in for faster pick-up.
• Key box pick-up options for contactless vehicle collection.
• 24/7 roadside assistance.
• Multiple insurance options included with rentals.
• Free cancellation on many bookings.
• Pay-on-arrival booking options.
• Blue+ reward program offering discounts and referral benefits.
• GPS included with selected vehicles.
• Carbon-neutral rental option for lower emissions.

Types of cars available

Blue Car Rental offers a wide range of vehicles suited to different travel needs and group sizes.

• Small and economy cars such as Toyota Aygo, Kia Rio, and Toyota Yaris.
• Mid-size SUVs like MG ZS, Dacia Duster, Jeep Renegade, and Suzuki Vitara
• Electric vehicles such as Tesla Model 3, Tesla Model Y, BYD Dolphin, and Kia EV6.
• Large SUVs such as Toyota Land Cruiser, Hyundai Santa Fe, and Land Rover Discovery.

Can you rent a car in one city and return it in another?

Yes. Blue Car Rental lets you pick up your vehicle in one location and return it in another, especially between Reykjavík and Keflavík, depending on the booking conditions.

2. Go Car Rental

Go Car Rental Iceland is a locally owned car rental company that was founded in 2011. The company focuses on providing affordable and reliable vehicles for travelers exploring Iceland’s diverse landscapes. Over the years, more than 500,000 travelers have rented vehicles from the company to travel around the country. 

Where are the company offices located?

Go Car Rental has offices in Reykjavík and near Keflavík International Airport (KEF). The company’s main Reykjavík office is located at Skógarhlíð 16, 105 Reykjavík, which serves as a convenient pickup and drop-off location for travelers staying in the capital city. Near the airport, the company operates from Fuglavík 43, 230 Reykjanesbær, which is about a five-minute drive from Keflavík International Airport. Travelers arriving at the airport can use the company’s free shuttle service from the terminal meeting point to reach the rental facility.

Can you rent a car online or only in person?

Customers can book a car online through the company’s website before arriving in Iceland. During the reservation process, travelers select their preferred vehicle, pickup location, and rental dates.

Does the company offer additional services?

• Free shuttle service between Keflavík International Airport and the rental office.
• Unlimited mileage on rental vehicles.
• Insurance coverage options included with rentals.
• Free cancellation on bookings.
• No deposit required for many reservations.
• 24/7 emergency assistance.
• Local customer support team.
• Self-service vehicle pickup and drop-off using a KeyBox system.
• Complimentary shuttle service within the Reykjavík area for customers.

Types of cars available

• Small and economy cars like Hyundai i10, Renault Clio, Toyota Yaris, Suzuki Swift and Kia Ceed.
• Midsize and family vehicles like Kia Ceed Wagon, Renault Megane Wagon, and Dacia Jogger.
• 4×4 SUVs and all-wheel drive vehicles like Dacia Duster, Suzuki Jimny, Nissan Qashqai, and Isuzu D-MAX.
• Passenger vans and larger vehicles like Dacia Jogger (7 passengers), Renault Trafic (9 passengers) and Volkswagen Caravelle.

Can you rent a car in one city and return it in another?

Yes. Go Car Rental allows one-way rentals between Reykjavík and Keflavík International Airport. Travelers can pick up their vehicle in Reykjavík and return it at the airport when their trip ends. A one-way rental fee of around €50 may apply depending on the booking.

3. Lotus Car Rental

Lotus Car Rental Iceland is a family run car rental company that focuses on providing affordable vehicles and personalized service to travelers visiting Iceland. The company offers a range of vehicles suited for different road conditions across the country, from small city cars to larger four wheel drive vehicles designed for rugged terrain. 

Where are the company offices located?

Lotus Car Rental operates near Keflavík International Airport (KEF). Travelers arriving at the airport can use the company’s complimentary shuttle service to reach the rental office. After exiting customs, customers can follow the signs to the meeting point where a representative will guide them to the office to collect their vehicle. Note that the company does not operate a rental desk inside the airport terminal.

Can you rent a car online or only in person?

Yes, travelers can reserve their vehicle online through the Lotus Car Rental website before arriving in Iceland. During the booking process, customers can choose the type of vehicle, rental dates, and pickup details. Once the reservation is confirmed, the vehicle can be collected at the rental office by presenting a valid driver’s license and booking confirmation. The company also provides a self service pickup option for certain bookings.

Does the company offer additional services?

• Free shuttle service between Keflavík International Airport and the rental office.
• Unlimited mileage on rental vehicles.
• Multiple insurance coverages including Third Party Liability, Collision Damage Waiver, Super Collision Damage Waiver, and Theft Protection.
• 24/7 roadside assistance.
• Free cancellation on bookings.
• No deposit required for many rentals.
• Seasonal studded winter tires during colder months.
• Fuel discount benefits with selected partners.
• Service affiliates around Iceland for maintenance support if needed.

Types of cars available

• Small cars like Toyota Aygo, Toyota Yaris and Suzuki Jimny (2 seats only, older model).
• Medium vehicles like Dacia Duster, Kia Ceed Wagon, Suzuki Vitara, and Jeep Renegade.
• Large vehicles like Honda CR V, Kia Sorento, Toyota Hilux and Land Rover Defender and Discovery.
• Passenger vans and larger vehicles like Volkswagen Caravelle (9 seater).
• Camper vehicles and roof tent options like Toyota RAV4 with roof tent, Dacia Duster with roof tent, and Toyota Hilux camper.

Can you rent a car in one city and return it in another?

Lotus Car Rental primarily operates from its location near Keflavík International Airport. Vehicles are picked up and returned at the same location.

4. Lava Car Rental

Lava Car Rental is a family owned car rental company established in 2016 in Iceland. The company focuses on providing reliable vehicles and straightforward rental services for travelers exploring the country. Lava Car Rental offers a wide selection of vehicles suited for Iceland’s varied driving conditions, including economy cars, SUVs, electric vehicles, and campervans. The company emphasizes on well maintained vehicles and transparent pricing so you can plan your road trip across Iceland with confidence.

Where are the company offices located?

Lava Car Rental operates from an office located at Flugvellir 23, 230 Keflavík, Iceland, which is close to Keflavík International Airport (KEF). Although the company does not have a rental desk inside the airport terminal, its office is only about five minutes from the airport. Travelers arriving at Keflavík International Airport can use the free shuttle service that connects the airport to the rental office for vehicle pickup and drop off.

Can you rent a car online or only in person?

Yes. Travelers can reserve their rental vehicle online through the Lava Car Rental website. During the booking process, customers can check vehicle availability, select their preferred car category, and manage reservation details. The company also offers online check in and a self service pickup option.

Does the company offer additional services?

• Free shuttle service between Keflavík International Airport and the rental office.
• Unlimited mileage on rental vehicles.
• Collision Damage Waiver insurance.
• Super Collision Damage Waiver insurance.
• Third Party Liability insurance.
• Gravel protection coverage.
• Theft protection.
• Fuel discount benefits.
• Online booking management for reservations.
• Self service pickup option for faster vehicle collection.
• Studded winter tires from November to April for safer winter driving.
• Essential equipment included for campervan rentals.

Types of cars available

• Economy cars like Toyota Aygo, Toyota Yaris and Dacia Sandero Stepway.
• 4×4 SUVs like Dacia Duster, Suzuki Vitara, Toyota RAV4, Nissan X Trail, and Toyota Land Cruiser.
• Electric vehicles like Tesla Model 3, Tesla Model Y, and MG4.
• Campervans like Renault Kangoo Campervan.
• Luxury vehicles like Kia Sorento, Land Rover Defender, and Toyota Land Cruiser.

Can you rent a car in one city and return it in another?

Lava Car Rental operates from its Keflavík location, so vehicles are picked up and returned at the same office. 

5. Hertz Iceland

Hertz Iceland is one of the longest operating car rental companies in the country. The company has been providing rental services in Iceland since 1971 and is part of the global Hertz brand. With more than five decades of experience, Hertz Iceland offers a wide range of vehicles suitable for different travel styles, from compact city cars to large SUVs and camper vehicles. The company focuses on modern vehicles that are regularly serviced, with most of the fleet being less than two years old.

Where are the company offices located?

Hertz Iceland operates multiple rental locations across the country, including Reykjavík, Keflavík, Akureyri, Egilsstaðir, Ísafjörður, Hafnarfjörður, Höfn, Bíldudalur, and Skagaströnd.

The company also has rental desks at several major airports in Iceland:

• Keflavík International Airport (KEF). 
• Reykjavík Domestic Airport (RKV).
• Akureyri Airport (AEY).
• Egilsstaðir Airport (EGS).
• Ísafjörður Airport (IFJ).
• Hornafjörður Airport (HFN).
• Bíldudalur Airport (BIU).

Can you rent a car online or only in person?

You can book a vehicle online through the Hertz Iceland website before your trip. The website lets you compare vehicles, check availability, and select rental dates. In addition to standard reservations, the company also offers self service pickup options at certain locations outside regular office hours.

Does the company offer additional services?

• Basic insurance coverage included with rentals.
• 24 hour emergency support.
• Rental locations across Iceland.
• Regularly serviced vehicles that are generally less than two years old.
• Flexible rental periods for short or long term bookings.
• Breakdown assistance and partner garages across the country.
• Seasonal rental offers and discounted packages.
• Self service pickup options at selected locations.

Types of cars available

Hertz Iceland offers a large fleet of vehicles suited for different travel needs and road conditions. You can rent cars and vehicles like Toyota Aygo, Suzuki Swift, Mazda CX 30, Renault Captur, Hyundai Tucson, Land Rover Defender, Mercedes Benz GLE, Tesla Model Y, Volkswagen ID.3, BMW X3 Plug in Hybrid, and BMW X5 Plug in Hybrid. You can also rent vans and camper vehicles like Volkswagen Caravelle 9 seater van, and Dacia Duster camper with a rooftop tent.

Can you rent a car in one city and return it in another?

Yes. Hertz Iceland allows one way rentals between different locations across the country. A one way rental fee may apply, depending on the pickup and drop off locations.

6. Avis Iceland

Avis is an international car rental brand that was founded in 1946. Over the decades, the company has grown into a global brand with thousands of locations worldwide. In Iceland, Avis Iceland offers a range of rental vehicles for travelers exploring the country, from compact cars to larger vans and four wheel drive vehicles.

Where are the company offices located?

Avis Iceland operates several rental stations across the country. The main office is located at Holtagarðar in Reykjavík, which serves as the company’s headquarters. Other locations include:

• Reykjavík Domestic Airport.
• Keflavík International Airport.
• Egilsstaðir Airport.
• Akureyri Downtown station.
• Akureyri Airport.

Because Avis has offices at Keflavík International Airport and several domestic airports, travelers can conveniently pick up their rental vehicle soon after arriving in Iceland.

Can you rent a car online or only in person?

You can book rental vehicles online through the company’s website. You can select a vehicle category, choose pickup and drop off locations, and manage reservations before arriving in Iceland. The company also offers QuickPass, a free pre-registration service that speeds up the rental process when picking up the vehicle.

Does the company offer additional services?

• Flexible cancellation policy with refunds when cancelled at least two days before the rental date.
• Global network of more than 5,500 rental locations in over 170 countries.
• Avis Preferred loyalty program with priority service and rewards.
• 24 hour emergency breakdown assistance.
• Multiple fuel return options including Bring Back Full, Fuel Up Front, and Pay On Return.
• Environmental policy focused on reducing emissions and adding eco-friendly vehicles to the fleet.
• Rental locations at major airports and cities in Iceland.

Types of cars available

• Passenger cars like Hyundai i10, Kia Picanto, Hyundai i20, Volkswagen Polo and Suzuki Swift.
• Electric vehicles like Renault Zoe, Hyundai IONIQ, and Tesla Model Y.
• Four wheel drive vehicles and SUVs like Kia Sportage, Suzuki Vitara, and Land Rover Discovery.
• Minibuses and minivans like Volkswagen Transporter (9 seater), Volkswagen Transporter 4×4 (9 seater), and Mercedes Benz Sprinter (12 seater).

Can you rent a car in one city and return it in another?

Yes. Avis generally allows travelers to pick up a vehicle in one location and return it at another participating rental station. Additional fees may apply for one way rentals between different cities.

7. Nordic Car Rental

Nordic Car Rental is a family owned car rental company founded in 2007 in Iceland. The company was built on principles such as honesty, reliability, and customer focused service. Nordic Car Rental focuses on providing well maintained vehicles at reasonable prices while creating long term relationships with customers. Each vehicle in the fleet is carefully inspected and regularly serviced to ensure safety and reliability for travelers exploring Iceland.

Where are the company offices located?

Nordic Car Rental operates from its office located at Bogatröð 1, 262 Reykjanesbær near Keflavík. The company primarily serves travelers arriving at Keflavík International Airport (KEF). Instead of a rental desk inside the terminal, after landing and collecting luggage, travelers meet a company representative at the airport and are transported to the nearby office where their rental vehicle is prepared.

Can you rent a car online or only in person?

Yes. Travelers can reserve vehicles online through the Nordic Car Rental website. During the booking process, customers can choose their vehicle category, rental dates, and pickup details. Providing accurate flight information helps the company coordinate the airport pickup service.

Does the company offer additional services?

• Flexible cancellation policy.
• Studded winter tires during the winter season.
• Unlimited mileage on rentals.
• Airport meet and greet pickup service at Keflavík International Airport.
• Customer assistance if issues occur during the rental period.

Types of cars available

• Small cars like Hyundai i10.
• 4×4 vehicles and SUVs like Nissan Juke, Dacia Duster, Suzuki Vitara, Kia Sportage, and Mitsubishi Eclipse Cross.
• Minivans like Ford Tourneo.
• Campervans like Renault Trafic, Dacia Dokker, Nissan NV200, and Peugeot Expert.

Can you rent a car in one city and return it in another?

Nordic Car Rental operates from its Keflavík area location, so vehicles are picked up and returned at the same office. 

Choosing the best car rental in Iceland

When selecting the best car rental in Iceland, there are a few factors that can make a big difference in your travel experience. The location of the rental office is important, as many travelers prefer companies located at or near Keflavík International Airport, the country’s main international gateway. The type of vehicle you choose also matters. A small car is usually sufficient for driving the Ring Road during summer, while a 4×4 vehicle is more suitable for winter conditions or highland roads. Insurance coverage is another thing to consider since Iceland’s roads can include gravel sections, strong winds, and rapidly changing weather. It’s also a good idea to book your rental car in advance, especially during peak travel seasons when vehicles can get booked quickly. Finally, check if the rental includes unlimited mileage, which is super helpful if you plan to drive long distances around the country.

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Niyati Shinde

Freelance writer

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