Iceland Car Hire Tips for UK Drivers: What You Need to Know

There’s no better way to experience Iceland than behind the wheel. With its vast open landscapes, dramatic coastlines, and ever-changing skies, a self-drive holiday offers freedom and flexibility that bus tours can’t match. For many UK visitors, hiring a car in Iceland is the key to unlocking its hidden wonders — from Reykjavík’s lively streets to the quiet majesty of the Westfjords.

At Höldur-Europcar, Iceland’s trusted car rental partner since 1966 and part of the Europcar network, we’re here to make your journey seamless, safe, and unforgettable. Below, you’ll find everything you need to know about hiring and driving a car in Iceland as a UK visitor — including practical tips, local insights, and advice for every season.

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1. Choosing the Right Car for Your Icelandic Adventure

Your choice of vehicle depends on where — and when — you plan to travel.

• Staying near Reykjavík or the South Coast?
  A standard 2WD car will be perfect for exploring major routes like the Golden Circle, Blue Lagoon, and black sand beaches near Vík. These areas are accessible year-round, with well-maintained roads and clear signage.

• Heading into the Highlands or remote regions?
  Choose a 4x4 or SUV. These vehicles are essential for tackling Iceland’s F-roads — unpaved mountain tracks only open in summer. Höldur’s fleet includes robust, eco-friendly 4x4s ideal for adventure seekers who want to reach places like Landmannalaugar or Þórsmörk.

Tip: Driving on F-roads with a non-4x4 vehicle is prohibited and can void your insurance.

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2. Car Hire Locations: Reykjavík and Keflavík International Airport

Most UK visitors arrive at Keflavík International Airport (KEF) — Iceland’s main gateway. Hiring a car directly from the airport is the most convenient way to begin your journey. With Höldur’s Europcar desk at Keflavík Airport, you can collect your car shortly after landing.

Prefer to start your road trip later? Höldur also offers Reykjavík city car rentals, perfect for those spending a few days in the capital before setting off.

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3. Driving in Iceland: Rules, Roads and Safety

Driving in Iceland is a joy, but the island’s unique landscape and weather require awareness and preparation. In Iceland, we drive on the right and overtake on the left. The steering wheel is on the left in every vehicle.

Licence and Age Requirements

UK driving licences are fully valid in Iceland — no international permit is needed. You must be at least 20 years old to rent a car (and 23 for larger 4x4s). Bring both parts of your licence and a valid credit card.

Speed Limits

• Urban areas: 50 km/h

• Rural roads: 80 km/h (gravel)

• Paved country roads: 90 km/h

Speed cameras are common, especially near Reykjavík and the South Coast. Always observe limits — not just to avoid fines, but because Icelandic roads can change conditions quickly.

Road Conditions and Weather

Iceland’s climate is famously unpredictable. From snow and ice in winter to midnight sun in summer, conditions shift rapidly. Before setting off each day, check:

• road.is for road closures and F-road openings

• vedur.is for weather updates

Winter driving tip: Even if it’s clear in Reykjavík, snow can arrive suddenly in the mountains. Höldur equips all cars seasonally — winter tyres from November to April, ensuring grip and safety whatever the forecast.

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4. Iceland Weather by Month: What to Expect on the Road

Understanding Iceland’s weather by month helps you plan your trip more smoothly:

 

Tip: Pack for all seasons. Iceland’s “four seasons in a day” reputation is well earned!

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5. Petrol, Parking and Practicalities

Fuel and Charging

Petrol (gasoline) prices in Iceland fluctuate but are generally higher than in the UK. Expect around ISK 300–350 per litre. Most stations accept credit cards and are self-service.

For eco-conscious travellers, Höldur’s electric car rentals are a sustainable choice. Charging stations are expanding quickly, particularly around Reykjavík and major routes.

Parking

• Reykjavík: Paid parking zones (P1–P4) are clearly marked; use the Parka app.

• Outside the city: Free and easy — just avoid blocking access or parking on moss or fragile ground.

• At attractions: Some popular sites (e.g., Þingvellir National Park) charge small parking fees.

See also our comprehensive guide to parking in Reykjavík.

Find even more information in our article What You Need to Know Parking in Iceland.

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6. Insurance and Protection

Iceland’s rugged terrain and shifting weather make insurance essential. Höldur offers comprehensive coverage options, including:

• Gravel Protection (GP) — reduces costs for windscreen or body damage from loose stones.

• Sand and Ash Protection (SADW) — vital in South Iceland where volcanic ash can damage paint.

• Super Collision Damage Waiver (SCDW) — minimises liability in case of an accident.

Pro tip: Always read your insurance terms before heading out. Iceland’s nature is unpredictable, but your journey shouldn’t be.

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7. Sustainable Driving: Protecting Iceland’s Beauty

As Iceland’s environment is delicate and unique, sustainable driving is central to Höldur’s ethos.

• Stick to marked roads — off-road driving is illegal and harms fragile moss landscapes.

• Choose an eco-friendly rental option such as hybrid or electric models.

• Respect local wildlife and take litter with you.

Höldur proudly supports ISO-certified environmental practices, helping ensure that every journey contributes to preserving Iceland’s magic for generations to come.

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8. How Long Does It Take to Drive Around Iceland?

The Ring Road (Route 1) loops around the island in roughly 1,332 km (828 miles). Driving it without stops takes about 17–18 hours, but it’s best enjoyed over 7–10 days — giving time to experience the waterfalls, volcanoes, and geothermal pools that define Iceland’s wild heart.

If time is short, focus on regions:

• South Coast (3–4 days): Easy drives from Reykjavík to Vík í Mýrdal, packed with waterfalls and black beaches.

• West Iceland (2–3 days): Snæfellsnes Peninsula — often called “Iceland in Miniature.”

• North Iceland (4–5 days): Akureyri and Lake Mývatn — geothermal wonders and whale watching.

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9. Essential Packing for a Self-Drive Adventure

• Valid driving licence (UK accepted)

• Credit card for rental and fuel

• Warm layers and waterproofs

• Sunglasses (yes — even in winter!)

• Snacks and water for long stretches between services

• Offline maps or GPS

Remember, Iceland is sparsely populated outside towns. Fuel up when you can, and keep emergency numbers handy (112 is the national emergency line).

 

FAQs: Iceland Car Hire for UK Travellers

Can I drive in Iceland with a UK licence?

Yes. UK licences are fully valid in Iceland — no international permit is required. Just bring both parts of your licence and ensure you meet the age requirements for your chosen vehicle.

Do I need a 4x4 in Iceland?

For Reykjavík, the Golden Circle, and the South Coast, a 2WD is fine year-round. For Highland roads (F-roads), a 4x4 is mandatory. Always check road.is before travelling.

What’s the best time of year to drive in Iceland?

Summer (June–August) offers the best weather and 24-hour daylight. Winter (November–March) brings snow and ice but also the northern lights — just drive with caution.

How much does it cost to hire a car in Iceland?

Prices vary by season and car type. When this is written, Budget rentals start around ISK 7,000–10,000 per day, while SUVs and 4x4s cost more. Booking early — especially at Keflavík Airport — ensures the best value.

 

Embrace the Freedom of the Open Road

Few experiences match the feeling of driving across Iceland’s vast, unspoiled landscapes — watching waterfalls tumble from cliffs, glaciers gleam in the distance, and the northern lights dance overhead. With Höldur, you can explore confidently, knowing you have a trusted, friendly, and eco-conscious partner by your side.

Your Icelandic adventure starts here — and we’ll make sure every mile is unforgettable.

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