Icelandic Car Rental Companies Compared
This page compares what ten Icelandic rental companies commit to in writing - which roads they prohibit, what it costs you to break the rule, and what their damage waivers actually exclude. It does not rank them, rate them or compare prices. The reason is simple: the daily rate changes every week and is easy to check yourself, while the contract changes rarely, is published in full, and is where the expensive surprises live.
How We Chose Which Companies To Include
The rule is mechanical rather than editorial: every Icelandic rental operator whose complete terms and conditions we could read in English on their own website in August 2026. Nothing here reflects a judgement about service or quality, and no company paid to be included or excluded.
Four operators are missing purely because we could not read their terms: the pages for Avis Iceland, Procar and Lava Car Rental returned errors, and Sixt Iceland blocked automated access. Where two brands publish the same document word for word - Blue Car Rental and Iceland Car Rental, Go Car Rental and Go Campers, Icerental4x4 and Northern Lights - we treat them as one group rather than inflating the count.
Prohibited Roads, And What Breaking The Rule Costs
| Operator | Roads named as restricted | Penalty for breach |
|---|---|---|
| Höldur / Europcar | All F-roads, 35 Kjölur, 550 Kaldidalur. Also unnumbered roads and closed roads. | The full excess: 265,000 ISK for a car, 475,000 ISK for a 4×4 |
| Hertz Iceland | All F-roads, 35, 550, and 208 to Landmannalaugar | 150,000 ISK flat |
| Blue Car Rental / Iceland Car Rental | All F-roads, 35, 550, 570 Jökulhálsleið, 26 Sprengisandur | 300,000 ISK under one clause, or 75,000 ISK + 15 ISK per km under another |
| Lotus Car Rental | All F-roads for 2WD, vans and EVs. The Krossá ford on F249 is banned for every vehicle. | No set fine; loss of cover |
| Go Car Rental / Go Campers | All F-roads, 35, 550, 864 Dettifoss east, F249 | 500 EUR, plus the excess |
| Icerental4x4 / Northern Lights | All F-roads, 35, 550 - and F249 banned outright for every vehicle | The full excess; 100,000 ISK for closed roads |
| Geysir | All F-roads, 35, 550, 26 | 500 EUR minimum + 1 EUR per km; 2,000 EUR for driving where prohibited by law |
| Reykjavik Cars | All F-roads, 35, 550 | The full excess |
| Route 1 | All F-roads, 35, 550 | Not stated; damage there is excluded from cover |
| Cars Iceland | All F-roads, 35, 550, 26 | Not quantified; a 5,000 ISK fine-handling fee applies |
The penalty is rarely the main cost. Damage occurring on a prohibited road is also excluded from your waiver, so you pay the fine and the repair. Go Car Rental additionally discloses that its vehicles carry trackers which detect F-road use - the only operator we read that states this. Note also that Blue Car Rental's own document sets two different penalties for materially the same conduct, 300,000 ISK in one clause and 75,000 ISK plus 15 ISK per kilometre in another.
River And Water Damage: The Real Divide
This is the most expensive exclusion in Icelandic car hire and the one where operators genuinely differ. The common claim that no Icelandic insurance covers water damage is false - but it is true of most of the market, and true even of products sold as zero-excess.
| Operator | Covered? | Detail |
|---|---|---|
| Höldur / Europcar | Excluded at every tier | Terms state explicitly that even the zero-excess product does not cover river crossings or underside damage. |
| Hertz Iceland | Excluded at every tier | Stated as "NOT covered at any time", including under the zero-excess pricelist. |
| Blue Car Rental | Covered, top tier only | The Liability Waiver covers water damage from driving through rivers, and also names wind damage to doors. |
| Lotus Car Rental | Covered, top tier only | River Crossing Protection at Platinum, for authorised 4×4s only, with the Krossá ford excluded outright. |
| Go Car Rental | Excluded | No tier covers it, and a deposit of up to 7,000 EUR may be taken against water, underside, sand and ash damage. |
| Icerental4x4 | Excluded | Listed in the damage-waiver exclusions with no top-tier buy-back. |
| Reykjavik Cars | Excluded | Water damage appears in the exclusion list. |
Our car rental insurance guide explains what each layer of cover actually means, and river crossings covers the technique that keeps you out of the claim in the first place.
Electric And Hybrid Vehicles
A growing trap, and one where the distinction between a contract term and a piece of advice matters a great deal. If the restriction is in your rental agreement, breaching it voids your cover.
| Operator | Restriction | Where it appears |
|---|---|---|
| Lotus Car Rental | Electric vehicles banned from all F-roads | In the rental agreement |
| Northern Lights | All hybrid vehicles banned from all F-roads | In the terms of service |
| Hertz Iceland | Some electric and plug-in hybrid 4×4s not allowed, because of battery positioning | On a requirements page, not in the terms |
| Höldur / Europcar | Advises against taking an EV on F-roads | Advisory page only; the contract restricts by drivetrain |
| Blue Car Rental | Advises against it, reasoning on drivetrain and charging | Blog post only; the contract restricts by drivetrain |
| Go Car Rental | No EV-specific clause | Contract restricts by drivetrain only |
Where They Agree, And Where They Do Not
The consistent parts. Every operator prohibits two-wheel-drive cars on F-roads. Nine of the ten name roads 35 Kjölur and 550 Kaldidalur explicitly, despite neither carrying an F prefix in the road register any more - making that the single most reliable rule in Icelandic car hire, and the one most likely to catch out a visitor looking at a map. Closed roads and unnumbered tracks are prohibited by everyone who mentions them.
The inconsistent parts. Only Hertz names road 208 to Landmannalaugar. Only Go names 864 on the east side of Dettifoss. Only Blue names 570 Jökulhálsleið, and it substitutes 26 Sprengisandur in a second clause. F249 to Þórsmörk is banned outright by Icerental4x4, banned only at the Krossá crossing by Lotus, placed in the two-wheel-drive clause by Go, and not mentioned at all by Höldur, Hertz or Blue - which affirmatively states that all its 4×4s are allowed on F-roads. Penalties span 75,000 ISK to the full excess, in two currencies.
Two drafting errors we are not going to reproduce as fact. Go Car Rental's terms give Kjölur as "road 25" in one clause and road 35 in another, and refer to Þórsmerkurvegur as road 249 in an exclusion where the F prefix belongs. These are the operators' own errors. If you are arguing a claim, quote the clause rather than our summary of it.
What This Page Does Not Compare
Not price, not fleet age, not customer service, not how anyone behaved at the desk. Those are either volatile, subjective, or both, and there are plenty of places to read opinions about Icelandic car hire. What is genuinely hard to find is a straight reading of what the contracts say, which is why that is all this page does.
Related Guides
Read the insurance guide for what CDW, SCDW and the zero-excess products actually cover, renting a car in Iceland for age and licence rules, and the F-roads guide for where the 4×4 requirement comes from - it is contractual, not statutory. Kjölur explains why a road with no F prefix is still off limits.
Frequently Asked Questions
Which Icelandic Rental Company Has The Best Insurance Terms?
On the single most expensive exclusion - river and water damage - Blue Car Rental and Lotus are the only two of the operators we read that cover it at all, and both only at their top tier. Every other company excludes it outright, including under zero-excess products that sound comprehensive. That is a narrow answer to a broad question: we compare published contract terms, not price or service, and the cheapest headline rate often carries the harshest excess.
Do All Icelandic Rental Companies Ban The Same Roads?
No, and the differences matter. Every operator we read bans two-wheel-drive cars from F-roads. Nine of the ten also name roads 35 Kjölur and 550 Kaldidalur explicitly, even though neither carries an F prefix any more. Beyond that they diverge: only Hertz names road 208 to Landmannalaugar, only Go names 864 by Dettifoss, only Blue names 570 Jökulhálsleið, and F249 to Þórsmörk is banned outright by Icerental4x4, banned only at the Krossá ford by Lotus, and not mentioned at all by Höldur, Hertz or Blue.
What Happens If You Drive A Prohibited Road?
Two things, and the fine is usually the smaller one. You pay a penalty - 150,000 ISK at Hertz, 300,000 ISK at Blue, 500 EUR at Go, or the full excess at Höldur, Icerental4x4 and Reykjavik Cars, which at Höldur means up to 475,000 ISK. Separately, damage occurring there is excluded from your waiver, so you are liable for the repair as well. Go Car Rental also discloses that its vehicles carry trackers that detect F-road use.
Can You Take An Electric Car On An F-Road?
It depends on the operator, and on whether the restriction is contractual or merely advice. Lotus bans EVs from all F-roads in its rental agreement, and Northern Lights bans all hybrids in its terms. Hertz says some electric and plug-in hybrid 4×4s are not allowed because of battery positioning, but that sits on a requirements page rather than in the contract. Höldur and Blue Car Rental restrict only by drivetrain in their agreements and put their EV warnings in advice pages and blog posts. A 4×4 badge on an EV is not enough - check what you actually signed.
How Did You Choose Which Companies To Include?
We included every Icelandic rental operator whose complete terms and conditions we could read in English on their own website in August 2026. That is a deliberately mechanical rule, so the selection is not a judgement about quality. Four operators are missing for that reason alone: the terms pages for Avis Iceland, Procar and Lava Car Rental returned errors, and Sixt Iceland blocked access. Where two brands publish the same document, such as Blue Car Rental and Iceland Car Rental, we list them once as one group.
Does This Page Compare Rental Prices?
No, deliberately. Rental prices in Iceland change daily with season, demand and vehicle class, so any figure we published would be wrong within a week and comparing them fairly would require booking the same dates across ten companies. What we compare instead is the contract you sign, which changes rarely and is published in full. That is where the expensive surprises live: excesses, exclusions and road restrictions, not the headline daily rate.
Sources
Every term on this page was read from the operator's own published terms and conditions in August 2026: Höldur, Hertz Iceland, Blue Car Rental, Lotus, Go Car Rental, Icerental4x4, Geysir, Reykjavik Cars, Route 1 and Cars Iceland. Rental terms change without notice and operators occasionally contradict themselves within a single document; before relying on anything here for a dispute, read the clause in your own agreement.
Last updated: 2026-08-08 · Reviewed against official sources.