About Our Car Hire
Travelling around Iceland by hire car is one of the best ways to experience the country. Along the way, you can look forward to spectacular views, dramatic landscapes and the freedom to stop whenever you come across a place you would like to explore a little more closely.
Your hire car is part of your package holiday, and you can choose between Avis and Europcar when booking your trip, either through our website or with one of our travel consultants.
We work with both companies because they offer good vehicles and a high level of service. We generally recommend Europcar, above all because our experience is that they provide particularly good service and are especially helpful if anything unexpected should arise during your hire.
Prices
Our prices include unlimited mileage and Collision Damage Waiver (CDW). Unlimited mileage means that you do not pay an additional charge based on how far you drive.
The excess varies between the different car hire companies and depending on the type of vehicle you choose. Please see the information for each vehicle type for the current terms and conditions.
It is important to note that CDW does not cover all types of damage. For example, damage to the underside of the vehicle may be excluded. All our car hire partners offer an additional Super Collision Damage Waiver (SCDW), which significantly reduces the excess. You can purchase this when you collect your vehicle in Iceland.
Road tax from 2026
From 1 January 2026, a new road usage tax is charged in Iceland. For passenger cars up to 3.5 tonnes, the charge is 6.95 ISK per kilometre driven, equivalent to approximately 4 pence per kilometre based on the exchange rate on 8 October 2026. The charge applies to all vehicles, regardless of fuel type.
For hire cars, the road usage tax is charged by the car hire company after you return the vehicle. Both Avis and Europcar charge the amount to the credit card registered for the hire.
Vehicle types
When booking a hire car, you choose a vehicle type rather than a specific make or model. The makes and models shown on our website are examples and illustrations, but represent the type of vehicle you are booking.
If you plan to drive in the Icelandic Highlands, you need a vehicle that is approved for driving on F-roads and for the conditions found in the Highlands. Always check that the vehicle type you choose is approved for the driving you are planning. These vehicles are marked HL (Highlands).
Booking rules
All hire cars are booked by 24-hour periods. For example, if you collect your vehicle at 5 pm, it must be returned by 5 pm on the return date. If you return the vehicle later, you will be charged for an additional day, payable directly to the car hire company.
All drivers must have held a valid driving licence for at least one year. The main driver must also provide a credit card as a guarantee when collecting the vehicle.
For passenger cars and SUVs, the minimum age is 20. For motorhomes, the minimum age is 23. Age requirements may vary depending on the vehicle type and car hire company, so please check the information for the vehicle type you are booking for the current requirements.
One-way hire and hotel delivery
If you collect and return your hire car at different locations, a one-way fee of approximately £95–£151 applies, depending on the vehicle type.
You can also have your hire car delivered to or collected from your hotel in Reykjavík for a fee of approximately £44. This service is available on request.
Motorhomes - late arrivals in Iceland
The motorhome collection centre closes at 6.30 pm. If you arrive in Iceland after this time, a fee of EUR 200 applies for the motorhome to be brought out for you. Motorhomes are collected from the Europcar Motorhome & Camper Center, located just a few minutes from Keflavík International Airport.
Insurance
See below for the insurance policies applicable to each car rental company.
