A rental that looks cheap per day can end up costing more by the time you return the keys, and a slightly higher rate can turn out to be the better deal. In Iceland, choices like transmission type, car size, and insurance shape your total far more than the headline price does.
This guide covers the decisions that matter most when booking a car rental that Iceland travelers rely on, with a close look at automatic car rentals in Iceland, so your road trip stays within budget.
Start With the Transmission
Manual cars are the default in Iceland, and they usually carry lower rates. Automatic cars are available in smaller numbers and tend to sell out first, especially in summer. If you drive an automatic at home, an auto rental Iceland booking made early is worth the effort. Learning to handle a stick shift on a steep gravel road after a long flight is a risky way to save money.
If you are comfortable with a manual, it can trim your total. If you prefer an automatic, reserve as soon as your dates are set, since waiting often means fewer choices at higher prices.
Match the Car to Your Route
Bigger vehicles cost more to rent and more to fuel, so choose the size your trip actually needs.
● Compact car: Suits one or two travelers sticking to paved roads, such as Reykjavik, the Golden Circle, and the Ring Road in summer.
● Mid-size or SUV: A better fit for families or anyone carrying extra luggage and gear.
● 4×4: Worth the added cost for winter trips, gravel routes, and highland roads. For a paved summer itinerary, it is usually an expense you can skip.
Think about luggage too. Two large suitcases and a camera bag fit easily in most compacts, so a larger car may not be necessary.
Book at the Right Time
Timing has a big effect on price. June through August is peak season, and rates climb as availability drops. May and September often bring lower prices with lighter traffic on the road. Longer rentals frequently come with a lower daily rate, so a week can cost less per day than a weekend.
Start comparing options several months ahead if you can. Last-minute bookings in summer tend to leave you with whatever remains, and automatics disappear quickly.
Read the Insurance Details
Iceland’s roads and weather cause damage that surprises many first-time visitors. Gravel can chip paint and windshields, and sand or ash can scratch a car. Strong wind can also push a door open and bend the hinges. Before you pay for extra coverage, check what is already included in your rental. Then compare the add-on prices with the repair costs they protect against.
Keep Fuel Costs Under Control
Fuel is one of the biggest expenses on any Iceland road trip, so a few habits help.
● Confirm the fuel type: Check whether your car runs on gasoline or diesel before the first fill-up. The wrong fuel is an expensive mistake.
● Drive at steady speeds: Frequent acceleration and braking use more fuel. Cruising near the limit, 90 km/h (about 56 mph) on paved rural roads, is efficient and safe.
● Travel light: Extra weight and roof boxes increase consumption.
● Refuel in towns: Stations in remote areas can be far apart, so top up when your tank reaches about half.
● Return the car as agreed: Our fuel policy is full-to-full, so refuel before drop-off to avoid refueling service charges, unless you have agreed otherwise with us.
Speed cameras are common, and fines can be steep, so staying within limits protects your wallet as well.
Watch the Small Fees
Small charges add up over a week or two. Look out for these before you book:
● Additional drivers: Sharing the driving is helpful on long days, but each extra driver may add a fee.
● Pickup and drop-off locations: Collecting a car at the airport and returning it elsewhere can change the price.
● Navigation extras: A phone with offline maps works well and costs nothing, so a rented GPS unit is rarely needed.
● Parking in Reykjavik: Many central zones are paid, and rates vary by area and time of day. Apps make payment simple.
● Tunnel tolls: Most tunnels are free, but the Vadlaheidi tunnel in the north is paid online shortly after you pass through.
Read your rental agreement carefully so these items do not catch you off guard.
Booking Through Hertz Iceland
Once you have settled on dates, transmission, and size, comparing providers is the final step. Hertz offers a range of vehicles for Iceland travelers, so you can look at automatic car rental options in Iceland, along with camper vans, and RVs as well in one place and choose the one that fits your itinerary and budget. When you are going to rent a car in Iceland for the first time, having every option listed together makes it easier to see what each rental includes, from insurance choices to extras.
If your plans change, or you decide a camper would suit a longer scenic stretch, you can explore those options under the same brand. It keeps planning organized and helps you compare costs clearly before you commit.
Final Thoughts
Keeping an Iceland road trip affordable comes down to a handful of smart decisions made early. Pick the transmission you are comfortable with, choose a car that suits your route, book ahead, and read the insurance terms closely. Then plan your fuel stops and watch for small fees.
With the budget settled, you can spend your time on the road enjoying it. Leave some room in your schedule for slow mornings and unplanned stops, since those are often the moments you remember most.
