10 Things Not to Do When Renting a Car in Iceland

Planning a road trip in Iceland? Renting a car is by far the best way to explore the country’s diverse landscapes—whether you’re chasing waterfalls, driving through lava fields, or soaking in geothermal hot springs. But getting the wrong car, the wrong deal, or the wrong rental company can turn your dream trip into a series of avoidable headaches.

This guide highlights the top mistakes travelers make when renting a car in Iceland and how to avoid them. With practical tips and a focus on hassle-free family travel, we’ll show you why Blue Car Rental is the smart choice for visitors who want flexibility, safety, and great value.

1. Don’t Wait Until the Last Minute to Book

Booking your car rental early in Iceland isn’t just smart—it’s essential. With limited availability on this island, especially during summer and holiday periods, procrastinating can leave you with higher prices, fewer vehicle options, or even no car at all. Families, in particular, risk missing out on the right-sized car with safety features like ISOFIX and ample trunk space for strollers and luggage. Travelers who delay may also lose access to convenient pickup options, such as Blue Car Rental’s 24/7 service at Keflavik Airport or its city-center location near Reykjavik Domestic.

Here’s why early booking is key:

• Better Rates: Prices tend to rise closer to departure, especially for family-friendly models.
• More Vehicle Options: Secure the best car for your itinerary—whether it’s a compact for the Golden Circle or a 4×4 for F-Roads.
• Smoother Check-In: Blue Car Rental’s pre-check-in option via the Wallet Pass speeds up key collection.

Pro Travel Tips

• Book as soon as your flights are confirmed.
• Opt for flexible reservations: Blue Car Rental offers no-deposit bookings with free changes.
• Monitor fleet availability: Especially if you need child seats, a larger vehicle, or a specific feature like AWD.

Blue Car Rental makes early booking easy with no deposit required, flexible cancellation policies, and the ability to modify your reservation without penalties. The earlier you secure your vehicle, the more choice you’ll have across their well-maintained fleet—from compact cars to 4×4 SUVs ready for Iceland’s rugged roads.

2. Don’t Skip on Insurance

Iceland’s beautiful but unpredictable environment creates unique driving risks: gravel damage, strong winds that can damage doors, ash and sandstorms that scratch paint, and sudden weather changes. Skipping on insurance could leave you with a hefty bill for repairs, especially when driving with kids, where unexpected moments (like a child opening a car door in the wind) happen.

Here’s why getting full coverage matters:

• Gravel Protection: Loose gravel is common, even on main roads.
• Sand and Ash Coverage: Volcanic ash and desert-like areas can damage paint.
• Wind Damage: Iceland’s notorious wind gusts can tear doors from hinges.
• Water Damage: Crossing streams or unexpected rain squalls.

Pro Travel Tips

• Book insurance when you reserve your car: It’s cheaper online.
• Ask about excess: Blue Car Rental’s Zero Worries insurance package means no excess—zero liability.
• Know your route: If you plan to explore beyond the Golden Circle, insurance is a must.
• Look for local expertise: Blue Car Rental staff know Iceland’s hazards and will recommend the right cover.

Blue Car Rental offers the Zero Worries insurance package, which covers wind, sand, ash, gravel, and water damage. No other company in Iceland offers such a complete package with no deposit required. It’s a small investment for total peace of mind—especially for families traveling with kids.

For more details on the real costs of a trip, check out How Much Does a Winter Trip Really Cost.

3. Don’t Underestimate Road Conditions

Icelandic roads can change dramatically with the weather. F-Roads in the Highlands are often unpaved, narrow, and require a 4×4. In winter, even the main Ring Road can become icy and challenging. Choosing a car without considering the route and season is a common mistake.

Here’s why careful planning is key:

• F-Road Access: Only 4×4 vehicles are legal on these rugged mountain tracks.
• Winter Challenges: Snow and ice demand vehicles with winter tyres and good ground clearance.
• Bridges and Blind Summits: Many roads have single-lane bridges and sharp crests that require caution.
• Seasonal Road Closures: Some roads open only in summer—know before you go.

Pro Travel Tips

• Plan routes with road.is and weather.is.
• Book a 4×4 SUV for winter or Highland travel.
• Ask Blue Car Rental staff for route advice—they’re locals!

Blue Car Rental’s expert team helps you match your itinerary with the right vehicle, whether it’s a compact car for city driving or a 4×4 SUV for snowy adventures. For more insights, check out Car Rental Iceland: 4×4 Cruising in a Winter Wonderland.

4. Don’t Forget About Pick-Up and Drop-Off Logistics

Many travelers confuse Keflavík International Airport (KEF) with Reykjavík Domestic Airport (RKV). Don’t make this mistake—most international flights land at KEF, where Blue Car Rental offers 24/7 pick-up right at the terminal. Their Reykjavík city office, near RKV, is perfect if you’re staying in the city first. Some travelers assume they can pick up at one location and drop off at another without confirming—always double-check your pick-up and return points when booking.

Here’s why pick-up logistics matter:

• KEF pick-up = Instant adventure: Blue Car Rental’s desk is right at the airport.
• City pick-up = Flexible if staying in Reykjavík first: No airport rush—ideal for exploring the capital.
• Key-box and Wallet Pass = Save time: Collect your car even after hours.
• One-way fees: Avoid surprise charges by confirming return points in advance.

Pro Travel Tips

• Confirm airport codes: KEF for international flights, RKV for domestic.
• Use Wallet Pass to skip lines: Pre-register your details online.
• Ask Blue staff for location tips: They’ll help you pick the best pick-up for your itinerary.

With Blue Car Rental’s Wallet Pass and key-box pickup options, you can skip the queue and hit the road sooner. Learn more in 5 Tips for a Faster Car Rental at KEF.

5. Don’t Ignore Local Rules and Parking Laws

Iceland’s driving laws are strict: no off-road driving, always wear seatbelts, headlights on at all times, and respect speed limits. Parking violations are common in Reykjavik and at tourist sites, and fines can add up quickly if you’re not prepared.

Here’s what you need to know:

• No Off-Roading: It’s illegal and can cause irreversible damage to Iceland’s fragile landscapes.
• Seatbelts and Headlights: Required for all passengers; headlights must be on at all times, even in daylight.
• Speed Limits: Typically 50 km/h in towns, 80 km/h on gravel, and 90 km/h on paved roads.
• Parking Rules: Pay attention to signs and zones, especially in Reykjavik where paid parking areas are common.
• Common Fines: Parking in restricted areas, unpaid fees, or using handicapped spots without a permit.

Pro Travel Tips

• Learn parking zones in Reykjavik before arrival.
• Always pay parking fees when required.
• Download a parking app for Reykjavik city parking.
• Ask Blue Car Rental staff for parking advice—they’ll help you avoid tickets.

Blue Car Rental provides helpful resources and a parking guide to avoid fines. Check out Parking in Iceland – Car Rental Reykjavik Guide for practical tips.

6. Don’t Choose the Cheapest Option Without Comparing Value

The cheapest rental isn’t always the best. Hidden fees, strict cancellation policies, and poor customer service can turn a “bargain” into an expensive headache. Always check what’s included in the price—especially in Iceland, where the weather and roads can be unpredictable.

Here’s what to watch for:

• Hidden Fees: Added charges for mileage, cleaning, or insurance excess.
• Limited Insurance: Some budget rentals only cover the basics; you’ll pay more for wind, gravel, and ash protection.
• Poor Customer Support: Long queues, no local expertise, and slow response to issues.
• Lack of Family Features: No child seats, limited vehicle choice, no ISOFIX.

Pro Travel Tips

• Read the terms carefully: Look for deposit requirements, insurance coverage, and cancellation flexibility.
• Compare total costs, not just the daily rate.
• Check for family perks: Like Blue Car Rental’s Blue+ rewards program—priority service, free upgrades, and discounts (see Blue+ Rewards).
• Look for promotions: Finding Coupon Codes for Iceland Car Rental can help you save.

With Blue Car Rental, you get transparent pricing, no deposit, free cancellations up to 48 hours, and Zero Worries insurance that covers the unexpected. It’s the value that counts—not just the sticker price.

7. Don’t Underestimate Iceland’s Weather

Iceland’s weather is famously unpredictable—bright sunshine can turn to fog, snow, or heavy rain in a matter of hours. Many travelers arrive expecting mild conditions year-round and are caught off guard by high winds, slippery roads, and temperature swings that can vary by 10 degrees in a single day. Choosing the wrong car or failing to adjust plans for weather can lead to delays, safety risks, and missed highlights.

Here’s what to know about Icelandic weather:

• High Winds: Can damage car doors if opened too quickly—always hold tight when exiting.
• Sudden Snow and Ice: Common even in spring and autumn, especially in higher elevations.
• Rain and Fog: Can reduce visibility dramatically—drive cautiously.
• Temperature Swings: Vary by region; pack layers and check weather.is daily.

Pro Travel Tips

• Book a 4×4 SUV or larger vehicle in winter or shoulder seasons.
• Use Blue Car Rental’s Zero Worries insurance—covers wind and weather damage.
• Ask staff for local route updates—they know where conditions change.

8. Don’t Forget About Fuel in Remote Areas

Running low on fuel in Iceland is no joke—gas stations can be few and far between, especially in the Highlands or the Westfjords. Many travelers underestimate distances and leave themselves stranded with an empty tank.

Fuel mistakes to avoid:

• Skipping fuel stops in rural areas: Fill up whenever you see a station.
• Not checking opening hours: Some stations close early, especially in small villages.
• Assuming card compatibility: Not all pumps accept foreign cards—ask Blue Car Rental for tips.

Pro Travel Tips

• Top off at every major station before long drives.
• Use apps or maps to locate stations in advance.
• Choose fuel-efficient models for longer trips—Blue Car Rental offers hybrid options.

9. Don’t Forget to Plan for Downtime and Culture

Iceland is more than just scenery—take time to explore local culture, food, and traditions. Many travelers rush from waterfall to waterfall without pausing to experience Icelandic life.

Cultural moments you shouldn’t miss:

• Café Culture in Reykjavík: Visit family-friendly spots with hot chocolate and books.
• Learn Local Names: Icelandic names are unique—read our guide Why Is Everyone Named –dóttir or –son?.
• Understand Traditions: From Yule Lads to folklore, deepen your trip with A Cultural Guide to Iceland – Quirks, Traditions & Travel Tips.

Pro Travel Tips

• Plan extra time in each destination—don’t rush.
• Add cultural stops to your itinerary for a richer experience.
• Ask Blue Car Rental staff for local tips—they know hidden gems.

By learning from these common mistakes, travelers can enjoy Iceland’s beauty and culture at a family-friendly pace. With the right car, the right insurance, and the right plan, your Iceland road trip will be safe, unforgettable, and uniquely yours.

10. Final Tips for a Smooth Car Rental Experience

• Book Early: Especially for summer trips and family-friendly vehicles.
• Choose the Right Vehicle: Consider your route, weather, and family size.
• Read the Fine Print: Understand insurance terms, fuel policies, and mileage limits.
• Plan Your Itinerary: For ideas, see Things to Do in Iceland – The Ultimate Guide.
• Drive Safe and Enjoy: Iceland’s beauty is best explored at your own pace.

With Blue Car Rental’s family-friendly service, all-inclusive insurance, and flexible booking options, you can focus on creating memories that will last a lifetime.

Final Thoughts

Renting a car in Iceland is an adventure in itself, but avoiding these common mistakes will help ensure your trip goes smoothly. With Blue Car Rental, you get local expertise, flexible pick-up options, full coverage insurance, and a family-friendly approach that makes Iceland’s breathtaking landscapes feel even more accessible. Book early, drive safely, and let the journey begin!