Iceland’s Largest Car Rental – Book with Confidence

What is the minimum age to rent a car in Iceland?

• To rent/drive a passenger car or an SUV one must be at least 20 years old and have held a driver's license for at least one year.
  
  
• To rent/drive a Luxury car, Motorhome, and certain groups of Camping vehicles the minimum age is 23 years, and a driving license held for at least one year.
  
  
• To rent/drive a bigger vehicle (i.e. large people carrier) which according to law at any given time requires an extended driver license one shall present an appropriate and valid license at the start of the rental.

See rental terms.

Do I need a 4x4 to drive in Iceland, or is a 2WD enough?

If you plan to stay on the paved Route 1 (The Ring Road) or visit the Golden Circle during the summer, a 2WD car is sufficient. However, if you are traveling during winter (November to April) or plan to explore the Icelandic Highlands, a 4x4 vehicle is highly recommended for safety and mandatory for F-roads.

Our 4x4 offerings

Can I drive my rental car on Icelandic F-roads?

You can only drive on F-roads (unpaved highland roads) if you rent a permitted 4x4 vehicle. Driving a 2WD vehicle on F-roads is strictly prohibited, illegal, and voids all rental insurances. F-roads are only open during the summer months.

Understandig Iceland's F-roads.

What documents do I need to pick up my rental car?

To pick up your car in Iceland, you must present a valid driver's license (printed in Latin characters), a physical credit card in the main driver's name, and a valid passport or ID. Digital driver's licenses are not accepted.

Do I need a credit card, or can I rent a car with a debit card?

A valid physical credit card in the main driver's name is required at pick-up to hold a security deposit. While you can pay for the final rental cost with a debit card, the initial guarantee must be made with a credit card.

What car insurance do I need in Iceland?

At Höldur Car Rental (Europcar Iceland), every rental automatically includes:

• CDW (Collision Damage Waiver): Protects against major collision costs. You’ll still pay an excess/deductible if damage occurs, but you’re not liable for the full value of the car.
• Third-Party Liability Insurance: Covers injuries or damages you might cause to others — required by law.
• PAI (Personal Accident Insurance): As required by Icelandic law, our rates include Personal Accident Insurance (PAI). This coverage protects you and your passengers in the event of injury, providing compensation for disabilities or, in the unfortunate case of a fatal accident, a lump sum indemnity.
• Theft Protection: Included in our rates and covers you against theft of the vehicle.

However, because of Iceland’s unique weather and volcanic terrain, we highly recommend upgrading to our Premium protection package. It includes Gravel Protection, Sand and Ash Damage Waiver (SADW), Super CDW, Tire and Wheel Protection (TWP) and zero-liability for peace of mind.

Read all about coverage options.

Where can I pick up and drop off my Höldur rental car?

We offer convenient pick-up and drop-off locations across Iceland, including directly in terminal at Keflavík International Airport (KEF), in downtown Reykjavík, and at regional airports such as Akureyri and Egilsstaðir.

See locations and hours.

What are the most important driving rules in Iceland?

In Iceland, you drive on the right. Headlights must be turned on at all times, day and night. Off-road driving is strictly illegal and carries massive fines to protect fragile nature. Note that driving on F-roads and gravel roads is not off-road driving – but when you drive off them, it is.  The general speed limit is 50 km/h in cities, 80 km/h on gravel roads, and 90 km/h on paved highways.

Learn all about driving in Iceland.

How does the new Iceland road tax work for rental cars?

Iceland’s new road tax is a "pay-as-you-use" model based on the distance you drive. The rate is ISK 8.81 per kilometer (approx. €0.06 / $0.07) for all vehicles under 3.5 tons, including electric, hybrid, petrol, and diesel cars. This amount includes administration, collection fees, and tax. Höldur Car Rental calculates your total distance at drop-off and charges the tax directly to your credit card. To balance this tax, the government has significantly lowered fuel prices at the pump.

More about the kilometer tax here.

Why choose Höldur Car Rental over other providers in Iceland?

As Iceland’s largest car rental company and the local Europcar franchisee, we combine global standards with deep local expertise. We have been a trusted travel companion since 1966, operating the country's widest network of rental locations. When you book with us, you are choosing a partner with over 60 years of experience in navigating Icelandic conditions.

Learn more about our company.

Does Höldur offer eco-friendly or electric rental cars?

Absolutely. We are proud to be leaders in the green energy transition in Icelandic transport. Our fleet includes a rapidly growing selection of 100% electric vehicles (EVs) and plug-in hybrids, perfect for environmentally conscious travelers. Whether you need a compact EV for city driving or a more robust electric SUV for the Ring Road, we provide the necessary charging cables and guidance on how to use Iceland’s extensive charging network.

Driving electric and hybrid vehicles in Iceland.

Are there any discounts or special offers for booking in advance?

Yes, booking early is the best way to secure a lower rate. We frequently offer seasonal promotions, early-bird specials, and discounts for extended rentals. We also offer budget-friendly mileage options to suit any road trip. We recommend checking our website regularly for the latest deals. 

Check our rates.

What should I know about driving in Iceland during winter versus summer?

Driving conditions in Iceland vary significantly by season. In summer (May–September), the days are long with nearly 24 hours of daylight, making it easier to explore. In winter (October–April), you must be prepared for snow, ice, and limited daylight. All our vehicles are fitted with studded winter tires during the winter months for your safety. If you plan to travel outside of urban areas in winter, we strongly recommend renting a 4x4 vehicle.

Learn about winter car rental.

Can I pick up my car at Keflavík Airport at any time?

Yes, we are an in-terminal operator at Keflavík International Airport (KEF). Our desk is conveniently located right in the arrivals hall, so you don't need to take a shuttle bus to pick up your car. During the peak summer season, we operate 24/7 to meet all arriving flights. In the winter season, our hours are adjusted to cover scheduled flights, ensuring we are there when you land.

See location details.

What happens if I encounter issues with the car during my trip?

Your safety is our priority. We offer 24/7 roadside assistance throughout Iceland. Because we have the largest network of service stations around the country, help is never far away. In the unlikely event of a breakdown, you can call our emergency number provided in your rental agreement, and our team will arrange for assistance or a replacement vehicle to keep your journey on track.

See how to reach us.