Renting a Car in Iceland

A rental car is the most flexible way to see Iceland, and the small print is where the money is. This page gives the rules as the operators and the law actually publish them: minimum ages checked against five major companies' terms, what the driving-licence regulation says about foreign licences, the real paved-versus-gravel numbers behind the gravel-protection pitch, and the deposits and fuel-pump card holds that surprise people at the desk.

Age And Licence: What The Operators Require

The pattern is consistent: 20 for standard cars everywhere, 23 for bigger and pricier vehicles, 25 for prestige models at Hertz, and a licence held for at least a year at all five. Go is the outlier in allowing under-20s to rent for a young-driver fee. None of the five publishes an upper age limit. Terms change without notice - the table records what each operator's published terms said on the read date, so confirm when you book.

What The Law Says About Foreign Licences

The driving-licence regulation (reglugerð nr. 830/2011, 29. gr.) is more generous than most rental desks: a licence issued in an EEA state or the Faroe Islands is valid in Iceland, and a licence from anywhere else is valid for up to 12 months from arrival - provided it is printed in Latin letters or comes with a translation into Icelandic, Danish, Norwegian, Swedish or English. The operators then add their own layer: Hertz requires an International Driving Permit or a notarised translation for non-Roman-script licences, and Höldur accepts only licences printed in Latin characters. In practice: bring the physical licence (digital versions are refused), a physical credit or debit card in the main driver's name - Hertz explicitly rejects Apple Pay, Google Pay and virtual cards - and your passport or ID.

Insurance And The Gravel Numbers

Collision damage waiver and third-party liability are always included; the decisions are about the excess. Standard CDW leaves a self-risk of roughly 150,000-475,000 ISK depending on operator and vehicle, and zero-excess packages cost about 1,250-6,500 ISK per day. The gravel-protection pitch rests on a real number: of the 12,949 km network Vegagerðin maintained per its 2018 annual report, only 44% was paved - 56% is gravel or otherwise unpaved. Several operators now include gravel protection as standard, so check before buying it twice. Sand-and-ash protection is the expensive gap in the windy south, and water damage is excluded everywhere except two top-tier waivers. Our car rental insurance guide sets out each cover with the operators' own figures, and the company comparison puts the operators side by side.

Deposits And Card Holds

Expect a card imprint or authorisation hold at pickup whatever you booked. Blue takes a card imprint "even when a voucher covers the cost of the rental"; Hertz places an authorisation hold based on estimated charges. Lotus publishes the clearest sliding scale, and it shows how deposits track the excess: 0 ISK with its Platinum cover, 65,000 with Gold, 150,000 with Silver, and 500,000 ISK when all optional cover is declined. The card generally must be physical and in the main driver's name.

Choosing The Right Vehicle

For summer travel on the Ring Road and paved routes, a two-wheel-drive car is enough and cheaper. A four-wheel-drive is required by every rental contract on highland F-roads - a 2WD there is a breach of contract that voids your cover - and is strongly advised for winter driving. Be realistic about your route: many visitors over-spend on a 4×4 they never take off tarmac, while others under-spec for the highlands. If you are considering an EV, check the F-road terms first - operators differ, and some restrict or ban electric cars on F-roads entirely.

Fuel And Practicalities

Fuel stations are self-service and take cards with a 4-digit PIN - verify yours works before travelling. Choosing the fill-up or full-tank option at an unattended pump places a temporary hold of about 15,000-20,000 ISK on the card, per Hertz Iceland's guidance; select a set amount instead to avoid it. Every town and village has a station, but the highland interior has none at all, so on highland routes start full and top up at the last town. At pickup, photograph any existing damage, note the fuel type, and keep the rental agreement in the car.

Related Guides

Pair this with the insurance guide and the company comparison before booking, the Ring Road guide and F-roads guide to choose a vehicle, and road conditions & safety for the rules and tools you will need on the road. The driving hub holds the full set.

Frequently Asked Questions

What Age Do You Have To Be To Rent A Car In Iceland?

The minimum is 20 for standard cars at all five major operators - Blue, Go, Hertz, Höldur (Europcar) and Lotus, per their published terms read 14 August 2026 - rising to 23 for larger 4×4s, vans and luxury models, and to 25 for prestige cars at Hertz. Go alone lets under-20s rent for a young-driver fee. Every operator also requires the licence to have been held for at least one year. There is no upper age limit in any of the five operators' published terms.

Can You Rent A Car In Iceland With A Foreign Driving Licence?

Yes. Under the Icelandic driving-licence regulation (reglugerð nr. 830/2011, 29. gr.), a licence issued in an EEA state or the Faroe Islands is valid in Iceland, and a licence from any other country is valid for up to 12 months - provided it is printed in Latin letters or accompanied by a translation into Icelandic, Danish, Norwegian, Swedish or English. Rental companies are stricter than the law: Hertz requires an International Driving Permit or notarised translation for non-Roman-script licences, and Höldur accepts only licences printed in Latin characters. Digital licences are refused - bring the physical card.

What Insurance Do You Need To Rent A Car In Iceland?

Collision damage waiver and third-party liability are always included, but the standard CDW leaves a self-risk (excess) of roughly 150,000-475,000 ISK depending on operator and vehicle, so most decisions are really about buying that excess down - zero-excess packages run about 1,250-6,500 ISK per day. Sand-and-ash protection matters in the windy south, and water damage is excluded everywhere except Blue Car Rental's and Lotus's top-tier waivers. Our car rental insurance guide breaks down each cover with the operators' own figures.

Do You Need Gravel Protection In Iceland?

If you leave the paved network, it is worth weighing. Of the 12,949 km road network Vegagerðin maintained per its 2018 annual report, only 44% was paved - so 56% is gravel or other unpaved surface, and a single flying stone on it can chip a windscreen. Several Icelandic operators now include gravel protection as standard; check whether yours does before paying for it twice, and read the excess that remains even with it.

Should You Rent A 2WD Or 4x4 In Iceland?

For summer travel on the Ring Road and other paved routes, a two-wheel-drive car is sufficient and cheaper. A 4×4 is required by every rental contract on highland F-roads - taking a 2WD there is a breach of contract that voids your cover - and is strongly advisable in winter. Match the car to your actual route: many visitors pay for a 4×4 they never take off tarmac, while others under-spec for the highlands. Note that some operators restrict or ban electric cars on F-roads; check the terms if you plan to rent an EV.

How Does Refuelling Work In Iceland?

Stations are self-service and require a card with a 4-digit PIN. Choosing the fill-up or full-tank option at an unattended pump triggers a temporary hold of about 15,000-20,000 ISK on the card, per Hertz Iceland's guidance - select a set amount to avoid it. Towns and villages reliably have stations, but the highland interior has none at all, so on highland routes start full and refuel at the last town.

Sources

Minimum ages, licence and deposit rules quoted from the published terms of Blue Car Rental, Go Car Rental, Hertz Iceland, Höldur (Europcar Iceland) and Lotus Car Rental; fuel-pump payment and card holds from Hertz Iceland's fuel guide; foreign-licence rules from reglugerð um ökuskírteini nr. 830/2011 (29. gr.); road-network figures from Vegagerðin's 2018 annual report. All sources read 14 August 2026. Rental terms change without notice - confirm current details directly with your provider before booking.

Last updated: 2026-08-14 · Reviewed against official sources.