What is the Best Car to Rent in Iceland?

Choosing the right rental car is one of the most important decisions you will make when planning your trip to Iceland. The freedom of a self-drive tour allows you to explore the island’s dramatic landscapes at your own pace. However, with varying road conditions and weather, selecting the appropriate vehicle is essential for a safe and enjoyable journey.

This comprehensive guide will help you determine the best car for your Icelandic adventure. We will walk you through the key factors to consider, from the types of roads you plan to travel to the season of your visit. Discover which vehicle in the Höldur fleet is the right fit for your itinerary.

See also: Best Car Models for Iceland: Guide by Route & Terrain.

Key Factors for Choosing Your Iceland Rental Car

Your ideal rental car depends entirely on your travel plans. Before you book, take a moment to consider the details of your trip, including group size and luggage.

Iceland's Road System: Paved, Gravel, and F-Roads

Iceland features three main types of roads, and your vehicle choice should align with the roads you intend to use.

• Paved Roads: The Ring Road (Route 1) and most major routes are paved and well-maintained. If your itinerary focuses on popular sights like the Golden Circle or the South Coast during summer, a standard 2WD vehicle is perfectly suitable.
• Gravel Roads: Many routes leading to stunning natural attractions, farms, and smaller villages are gravel. While these roads are generally navigable with any car, a vehicle with higher clearance can provide a more comfortable ride and reduce the risk of undercarriage damage.
• F-Roads (Highland Roads): These are mountain tracks that lead into Iceland's rugged interior highlands. They are unpaved, often have un-bridged river crossings, and are only open during the summer months (typically late June to early September). By law, you must have a 4x4 vehicle to drive on F-roads.

Weather, Climate, and Seasons

Iceland's weather is famously unpredictable and has a significant impact on driving conditions.

• Summer (June - August): Conditions are at their mildest, with long daylight hours. A 2WD car is sufficient for most Ring Road trips. However, if you plan to access the highlands, a 4x4 rental in Iceland is mandatory.
• Winter (October - April): Expect snow, ice, and strong winds, especially in the North and East. Main roads are regularly cleared, but conditions can change rapidly. We strongly recommend a 4x4 vehicle equipped with studded winter tires for enhanced safety, traction, and stability during this period.
• Shoulder Seasons (May & September): Weather can be mixed. While a 2WD might suffice, a 4x4 offers greater peace of mind and flexibility if you encounter early snowfall or late-season icy patches.

General Considerations

Beyond roads and weather, think about these practical needs:

• Group Size & Luggage: Ensure your vehicle has enough space for all passengers and their luggage. A comfortable journey is a happy journey, so avoid overcrowding.
• Budget: While larger, more capable vehicles come at a higher price point, they provide access to more remote areas and offer greater safety in winter. Balance your budget with your itinerary's demands.
• Fuel Type: Consider the fuel efficiency of your chosen vehicle, especially for long drives around the Ring Road.

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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

 

Tips for Renting a Car in Iceland

Booking your vehicle is just the first step. Keep these tips in mind for a smooth rental experience.

• Book in Advance: To secure your preferred vehicle and get the best price, especially during the peak summer season, it is crucial to book your car rental well ahead of time.
• Choose the Right Insurance: Icelandic conditions can be harsh on vehicles. Consider adding insurance options like Sand and Ash Protection (SADW) or Gravel Protection (GP) for comprehensive coverage and peace of mind.
• Understand Rental Policies: Familiarize yourself with the rental agreement, including age restrictions, mileage limits, and fuel policies. Höldur is committed to transparency and our team is always ready to clarify any questions.
• Convenient Pick-up Locations: Höldur offers convenient service desks, including the option to secure a rental car from Keflavik Airport upon your arrival or from our office in Reykjavik.

Tips for Driving Safely in Iceland

Driving in Iceland is a unique experience. By following local rules and respecting nature, you can ensure a safe trip.

• Headlights On at All Times: It is legally required to have your headlights on 24/7, year-round.
• Adhere to Speed Limits: Speed limits are strictly enforced. They are typically 90 km/h on paved roads, 80 km/h on gravel roads, and 50 km/h in urban areas.
• Never Stop on the Road: Even if the view is breathtaking, never stop your car on the road itself. Pull over only in designated parking areas or safe turnouts.
• Check Road and Weather Conditions: Before heading out each day, check umferdin.is for road closures and conditions and vedur.is for the latest weather forecast.
• Be Mindful of Animals: Sheep often roam freely near roads, especially in summer. Slow down and be prepared to stop.

Choosing the right car is the key to unlocking an unforgettable Icelandic road trip. At Höldur, we are dedicated to providing reliable vehicles and exceptional service to help you explore our beautiful country safely and confidently.

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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