How to Save on Fuel Costs During Your Iceland Road Trip

Planning an Iceland road trip is an exciting adventure, filled with rugged coastlines, cascading waterfalls, volcanic wonders, and steaming hot springs. But let’s be honest — with long driving distances and remote regions to explore, fuel expenses can quickly add up. The good news? With a few smart strategies, you can keep your fuel costs in check and enjoy every breathtaking moment without breaking the bank.

Whether you're cruising the Ring Road or heading deep into the highlands, here’s how to drive further, spend less, and make the most of every litre in Iceland — all while enjoying the comfort, reliability and local know-how of Höldur Car Rental.

See also: Eco-Friendly Road Trips in Iceland: Sustainable Travel Tips.

Smart Ways to Save on Fuel in Iceland

1. Take Advantage of Höldur’s N1 Fuel Discount

Here’s a tip that can save you every single time you refuel. When you rent a car from Höldur, you’ll find a special discount tag attached to your key fob. This tag gets you -5 ISK off every litre at N1 gas stations, one of the most widespread fuel providers across Iceland.

N1 stations are dotted throughout the country — from Reykjavík to remote corners of the Eastfjords — making them a convenient and cost-effective choice for all travellers. Simply activate the key tag during payment and the discount is automatically applied. It’s one of the easiest ways to keep more krónur in your pocket.

2. Choose the Right Car for Your Journey

Fuel efficiency starts with your choice of vehicle. Not every traveller needs a 4x4 — especially if you’re sticking to paved roads and main tourist routes. Höldur offers a range of eco-friendly, fuel-efficient vehicles, ideal for couples, solo travellers or families exploring the Ring Road or Golden Circle.

If you’re venturing into the highlands or exploring gravel roads, a 4x4 may be necessary — but ask us about options with lower fuel consumption. We’re happy to help you choose the most suitable (and efficient) vehicle for your itinerary.

3. Plan an Efficient Route

Spontaneity is part of the magic of a road trip — but a bit of thoughtful planning can make a big difference at the pump. Use informational websites like vedur.is (for weather) and umferdin.is (for road conditions) to avoid unnecessary backtracking.

Try grouping attractions by region to reduce criss-crossing the country. For instance, explore the Snæfellsnes Peninsula over two days rather than rushing back and forth from Reykjavík.

And don’t forget: Iceland’s scenery is the journey — not just the destination. Slowing down and spacing out your route means you’ll use less fuel and see more.

4. Drive Smoothly and Within Speed Limits

It’s not just about safety — aggressive driving and speeding are a surefire way to waste fuel. Accelerating slowly, keeping a consistent speed, and using cruise control when possible will help your car use fuel more efficiently.

Bonus: Icelandic roads are often narrow or winding, especially in the countryside. A steady pace means a smoother, safer journey — and better fuel economy.

5. Lighten Your Load

It might sound simple, but the heavier your car, the more fuel it consumes. Before setting off, remove any unnecessary gear, avoid overpacking. Every kilo counts.

6. Keep Tyres Properly Inflated

Under-inflated tyres can reduce fuel efficiency by as much as 3%. Check your tyre pressure regularly — especially before long drives. All Höldur vehicles are maintained to top standards, but we always recommend a quick check at service stations along the way.

Your Journey Starts with a Smart Plan

Fuel costs don’t have to derail your Iceland road trip dreams. By choosing a fuel-efficient vehicle, taking advantage of Höldur’s exclusive N1 discount, and following these simple tips, you’ll have more to spend on what truly matters — soaking in hot springs, hiking volcanoes, and chasing the northern lights.

Frequently Asked Questions

How do I use the Höldur N1 fuel discount tag?

Just insert the tag on your rental key fob close to the N1 pump scanner before paying. The -5 ISK/litre discount applies automatically.

Where can I find N1 stations in Iceland?

N1 stations are located in towns and along major travel routes across Iceland — ideal for road trippers using the Ring Road, Golden Circle, or heading out to the Westfjords.

Which car is most fuel-efficient for driving around Iceland?

Our compact models like the Toyota Yaris or Dacia Duster offer excellent fuel economy. If you’re unsure, our team will help match you with the right car for your plans.

Are petrol prices higher in rural areas?

Yes, slightly. That’s why planning your fuel stops around N1 locations can help save money, especially when you factor in the Höldur discount.

Is fuel cheaper near Keflavík Airport?

Fuel prices are fairly consistent near Keflavík, but prices can rise the further you go from the southwest. Top up at the start and plan ahead.

How far can I drive on one tank in Iceland?

Depending on your vehicle and conditions, most fuel-efficient cars can travel 600–900 km on one tank. Refill early when in remote areas.

Does Höldur offer electric or hybrid car rentals?

Yes! We’re proud to support sustainable travel in Iceland. Ask us about our hybrid or plug-in electric options.

Can I refuel with the discount at night?

Yes. Most N1 stations are open 24/7 with self-service pumps that accept cards and the Höldur tag, even when unattended.

Plan Your Iceland Road Trip Today

Exploring Iceland by car is an experience like no other. To make the most of your trip, choose a rental vehicle that aligns with your driving skills, travel plans, and preferences. Höldur offers a diverse selection of manual and automatic rental cars, from budget-friendly options to 4x4 SUVs tailored for Iceland’s rugged landscapes.

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