What is the Best Car to Rent in Iceland?

Your Expert Guide to Choosing the Right Vehicle for an Unforgettable Icelandic Adventure

If you're planning a trip to Iceland, chances are you've already imagined driving through dramatic lava fields, winding past waterfalls, or spotting the northern lights from a remote fjord. But what’s the best car to rent in Iceland to make those daydreams a reality?

Whether you're flying in from the UK or North America, choosing the right rental car can shape the entire experience. At Höldur, we’ve helped travellers explore Iceland since 1966 — and we know that the perfect ride makes all the difference.

In this guide, you’ll find:

• A breakdown of Iceland’s top rental cars from Höldur’s eco-conscious, adventure-ready fleet

• Pros and cons of each vehicle type for different group sizes and travel styles

• Local insights into terrain, weather and road conditions

• Handy FAQs and tips to support your car hire decision

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Why Choosing the Right Rental Car in Iceland Matters

Driving in Iceland is more than just getting from A to B — it’s part of the adventure. From coastal Ring Road routes to unpaved highland tracks, Iceland’s landscapes demand reliable, well-suited vehicles.

At Höldur, our fleet is carefully selected for Icelandic conditions and traveller comfort. Whether you’re picking up your vehicle at Keflavík International Airport or Reykjavík city, every car comes backed by expert support and Europcar-quality service.

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Best Höldur Rental Cars in Iceland: Top Picks by Travel Style

1. Toyota Yaris – Best for Solo Travellers or Budget Couples

Type: Economy Car
Ideal for: City breaks, short stays, summer Ring Road trips

Pros:

• Affordable and fuel-efficient

• Easy to park in Reykjavík and towns

• Great for paved roads in summer

Cons:

• Not suitable for F-roads or winter conditions

• Limited boot space for gear-heavy trips

Perfect for: Travellers who want an affordable and efficient drive without compromising comfort. 

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2. Dacia Duster 4x4 – Best for Highland Explorers on a Budget

Type: Compact SUV / 4WD
Ideal for: Summer highland trips, Ring Road, budget-conscious adventurers

Pros:

• 4WD capability for light off-road travel

• Affordable compared to larger SUVs

• Reliable in windier conditions

Cons:

• May struggle on rougher F-roads in heavy rain

• Smaller boot compared to larger 4x4s

Great value for adventurous couples or friends exploring beyond the basics.

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3. Toyota Proace – Best for Families or Small Groups

Type: 9-seater Minivan
Ideal for: Family road trips, group holidays, travellers with lots of luggage

Pros:

• Ample seating for up to 9 passengers

• Generous boot space for bags, skis, or gear

• Smooth ride comfort on long drives

Cons:

• Larger size may be less convenient in tight city parking

• Not allowed for F-road highland terrain

Perfect for multi-generational holidays or group travel around Iceland’s Ring Road, offering room to relax and enjoy the views.

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4. Toyota Land Cruiser – Best for Winter and Highland Driving

Type: Premium 4x4
Ideal for: Highland adventures, winter road trips, remote travel

Pros:

• Supreme traction and handling

• High clearance for challenging routes

• Roomy and luxurious

Cons:

• Premium price point

• Less fuel-efficient

The trusted companion for rugged winter expeditions and serious highland exploring.

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5. Suzuki Jimny – Best for Stylish Solo or Duo Explorers

Type: Small 4x4
Ideal for: Minimalist off-road travellers, adventure-seeking couples

Pros:

• Compact but off-road capable

• Fun to drive on mountain roads

• Eye-catching and quirky

Cons:

• Limited boot and seating space

• Bumpy on long stretches

A fun, nimble ride for road trippers wanting Instagram-worthy moments without excess.

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6. Kia Ceed Sportswagon – Best for Comfort and Cargo

Type: Estate
Ideal for: Photographers, couples with gear, long road trips

Pros:

• Spacious boot for luggage and equipment

• Smooth handling and low fuel use

• Great for the Ring Road

Cons:

• Not suitable for F-roads

• Lower ground clearance

A solid choice for photographers or travellers with lots of kit.

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Iceland Car Rental Tips Based on Traveller Type

Frequently Asked Questions (FAQs)

Do I need a 4x4 rental car in Iceland?

If you're heading into the highlands or visiting in winter, yes. For city or summer Ring Road travel, a 2WD is often sufficient.

What car should I rent in Iceland in winter?

Opt for a 4x4 like the Toyota Land Cruiser or Tyota RAV4 — Icelandic winter roads can be icy and windy.

Is it better to rent a car from Keflavík Airport or Reykjavík?

Most visitors choose Keflavík Airport car rental for convenience — it’s perfect if you're arriving on an international flight.

Can I drive on F-roads in any rental car?

No — only approved 4WD vehicles are allowed. Check the vehicle's specifications and Icelandic road rules before venturing onto F-roads.

Is Höldur’s fleet eco-friendly?

Yes — we offer a wide range electric vehicles (EVs). Sustainability is at the heart of Höldur’s mission.

What’s the most popular rental car for the Ring Road?

The Dacia Duster is a top choice: budget-friendly, 4x4-ready, and fuel efficient.

Can I rent a car in Iceland with a UK or US licence?

Absolutely — valid UK and US driver’s licences are accepted without an International Driving Permit.

Are snow tyres included in winter rentals?

Yes — all Höldur cars come equipped with season-appropriate tyres, including studded tyres in winter.

How far in advance should I book my rental car in Iceland?

Book at least 2–3 months ahead, especially during summer and holiday periods.

What’s included in my Höldur car rental?

All rentals include basic insurance (CDW, TP & PAI), a 24/7 helpline, and access to a wide network of service stations across Iceland.

Final Thoughts: Your Icelandic Journey Starts with the Right Car

From glacial lagoons to black sand beaches, Iceland is a land of wonder — and your vehicle is the bridge between destinations. Whether you're a solo traveller with a camera, a family of five chasing waterfalls, or a thrill-seeker hunting northern lights, Höldur has the right car to make your journey seamless and inspiring.

With local expertise, Europcar standards, and a commitment to sustainability, your Icelandic road trip is in trusted hands.

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