Car Rental in Iceland for Canadian Travelers

Embarking on an Icelandic adventure? Renting a car can be the ideal way to explore the country's stunning landscapes. However, if you're traveling from Canada, you might have a few questions about the process.

Can I rent a car in Iceland with my Canadian driver's license?
What type of insurance coverage is recommended for the varied terrains in Iceland?
Are there additional charges for winter equipment or GPS systems?
What driving rules should I be aware of when traveling on Icelandic roads?
Is it possible to arrange for pick-up and drop-off at different locations?

This guide provides answers to these and other essential questions, equipping you with the information needed to ensure a safe and memorable driving experience in Iceland. A quick overview is also included for your convenience.

Can Canadian Citizens Drive in Iceland?

Yes, Canadian travelers can legally drive in Iceland with the proper documentation. Age restrictions and additional document requirements may apply.

Form of ID:
A valid passport.
Driving licence:
Accepted driving licence include:
• Original driving licence + International Driving Permit (IDP)
or
• EU/EEA Driving License
Notes: Please note that an International Driving Permit (IDP) is only a translation. You must present your original driving licence with the original IDP at the counter. EU/EEA driving licenses are valid for car rental across the EU/EEA, as well as in Switzerland and the United Kingdom.
Accepted cards:
Physical credit cards in the full name of the main driver. Accepted cards include Visa, MasterCard, Diners Club, JCB, Discover, and AMEX. Debit cards are not accepted.
Age requirements:
Drivers must be between 18 and 99 years old. Young drivers aged 20-24 may incur an additional fee of US$ 11.81 per day.

Ready to Rent?

Requirements may vary between rental companies. Always confirm details when booking.

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Which Car Rental Companies Are Best?

Explore options from well-established global chains to local rental enterprises, each catering to diverse needs for travelers from Canada visiting Iceland.

Global Chain Companies

Local Brands

Europcar
global
8.5
Locations:
95
Prices:
$$
Key Advantages
- Wide range of vehicles
- Flexible pick-up and drop-off locations
- Loyalty program for frequent renters
- Excellent customer service
Best for
Leisure travelers and eco-conscious renters
Hertz
global
8.5
Locations:
72
Prices:
$$$
Key Advantages
- Largest fleet in USA
- Premium vehicle selection
- Gold Plus Rewards loyalty program
- Express rental counters
Best for
Business travelers and premium vehicle needs
Budget
global
8.5
Locations:
51
Prices:
$
Key Advantages
- Competitive pricing
- Convenient locations
- Excellent customer service
- Loyalty rewards program
Best for
Cost-conscious travelers and families
SIXT
global
8.5
Locations:
20
Prices:
$$
Key Advantages
- Wide selection of premium and luxury cars
- Flexible rental terms
- Easy online booking
- Excellent customer service
Best for
Travelers seeking premium vehicles and flexible rental options
Alamo
global
8.5
Locations:
16
Prices:
$$
Key Advantages
- Great value for money
- Quick and easy booking process
- Excellent customer service
- Wide range of vehicle options
Best for
Leisure travelers and families

Icerental 4x4
local
8.5
Locations:
2
Prices:
$$
Key Advantages
- Specialized in 4x4 and SUV rentals
- Knowledgeable staff on winter conditions
- Competitive pricing for long-term rentals
- Flexible pick-up and drop-off options
Best for
Adventure seekers and winter travel
FAIRCAR
local
8.5
Locations:
6
Prices:
$$
Key Advantages
- Competitive pricing
- Personalized customer service
- Convenient pickup and drop-off locations
- Wide range of vehicle options
Best for
Budget-conscious travelers and local rentals
ACE Rent A Car
local
8.5
Locations:
7
Prices:
$$
Key Advantages
- Competitive pricing
- Customer-friendly service
- Flexible rental options
- Special deals for long-term rentals
Best for
Budget-conscious travelers and families
SAGA Car Rental
local
8.5
Locations:
1
Prices:
$
Key Advantages
- Personalized customer service
- Convenient local locations
- Competitive pricing
- No hidden fees
Best for
Budget-conscious travelers and local rentals
Lava
local
8.5
Locations:
1
Prices:
$-$$
Key Advantages
- Personalized customer service
- Convenient pickup and drop-off locations
- Competitive pricing
- Local knowledge and recommendations
Best for
Budget-conscious travelers and local excursions

Recommendations for Canadian Travelers

Choose Global Chains If:

This is your first car rental experience in Iceland
You require comprehensive nationwide coverage
24/7 customer support is essential
You are traveling for business or official purposes

Choose Local Brands If:

You aim to economize on costs
Your stay is confined to Reykjavik or nearby areas
You are interested in unique or specialized vehicle options
You are comfortable utilizing app-based rental services

How to Choose the Right Car?

Choosing the right rental car can make your trip in Iceland more comfortable, safe, and enjoyable. Consider your travel group size, the destinations you plan to visit, and the type of driving you'll be doing. Compare car models and rental policies to find the option that best fits your journey.

Seating and Luggage
Consider the size of your travel group and luggage requirements
- Economy cars (2-4 people, 1-2 suitcases)
  Suitable for city driving and short trips
- Compact cars (4-5 people, 2-3 suitcases)
  Offer a balance between space and fuel efficiency
- Mid-size cars (5 people, 3-4 suitcases)
  Comfortable for longer distances
- Full-size/SUV (5-7 people, 4+ suitcases)
  Ideal for family vacations and group travel
Transmission Type
Choose between automatic and manual transmission
- Automatic transmission
  Easier for city driving and traffic, common in Iceland
- Manual transmission
  Typically cheaper, offers better fuel economy, and more control
- Consider your comfort level with driving in Icelandic conditions
Insurance Included
Verify the insurance coverage provided with your rental
- Basic liability
  Covers damages to other vehicles and property, usually included
- Collision Damage Waiver (CDW)
  Covers damage to the rental car, often optional
- Theft protection
  Protects against car theft, may be included or additional
- Personal insurance
  Check if your Canadian insurance or travel insurance applies to car rentals in Iceland
Cancellation Policy
Understand booking flexibility and associated fees
- Free cancellation
  Typically available up to 24-48 hours before pickup
- Prepaid vs. Pay-at-counter
  Prepaid options are often cheaper but less flexible
- Change fees
  Cost for modifying booking details
- Travel insurance
  Consider coverage for trip cancellations or delays
Mileage Policy
Review distance restrictions and potential extra costs
- Unlimited mileage
  Best for exploring Iceland's Ring Road and beyond
- Limited mileage
  Cheaper daily rate but extra charges for exceeding limits
- Consider your planned itinerary and possible detours
- Include mileage costs when comparing total rental expenses
Fuel Policy
Understand fuel requirements and return conditions
- Full-to-Full
  Return with the same fuel level, most economical option
- Full-to-Empty
  Pay upfront for a full tank, convenient but potentially more expensive
- Same-to-Same
  Return with the same fuel level as at pickup, fair pricing
- Compare pre-purchased fuel options with local gas prices

Quick Decision Guide

City Travel
Compact/Economy car with automatic transmission, full-to-full fuel policy
Reykjavik, Akureyri
Road Trip
Mid-size/Full-size car with unlimited mileage and flexible cancellation policy
Ring Road, Golden Circle
Vacation
SUV/4x4 with comprehensive insurance and prepaid fuel option
Remote areas, F-roads

Compare with Confidence on QEEQ

Don't settle for the first option you find. QEEQ makes it easy to compare car types, policies, and total costs from multiple providers. See all fees upfront, read real customer reviews, and choose the perfect car for your adventure.

Compare all car rental deals
No hidden fees
Real customer reviews

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What Are the Popular Destinations in Iceland?

Iceland is renowned for its breathtaking landscapes and unique natural attractions. Popular destinations include Reykjavik, the Golden Circle, and the Ring Road, all of which are ideal for road trips and exploring at your own pace.

What Insurance Do I Need?

You'll need at least basic insurance to legally drive in Iceland, but additional coverage is highly recommended due to unique road conditions such as gravel roads and unpredictable weather. Familiarize yourself with what is included in your rental agreement to avoid unexpected expenses.

Types of Insurance Coverage

Collision Damage Waiver (CDW)
Covers damage to the rental car caused by collisions, and is often a mandatory inclusion.
CA$20-35/day
Essential
Theft Protection (TP)
Protects against theft of the rental vehicle or damage resulting from theft.
CA$10-15/day
Recommended
Super Collision Damage Waiver (SCDW)
Reduces your financial liability further than standard CDW, covering more extensive damages.
CA$15-25/day
Optional
Gravel Protection (GP)
Covers damage to the car's windscreen, headlights, and undercarriage caused by loose gravel on Iceland's roads.
CA$10-20/day
Highly Recommended
Sand and Ash Protection (SAAP)
Protects against damage caused by volcanic ash and sandstorms, which is a unique risk in Iceland.
CA$15-30/day
Optional
Personal Liability Insurance (PLI)
Covers injury or damage to others and their property. Often included in the rental package.
Included
Included

QEEQ's Complete Protection Solutions

Perfect for travelers who want comprehensive protection without the complexity. One price covers everything, and AXA's trusted network ensures reliable claims processing throughout Iceland. Get comprehensive coverage online for about 50% less than counter rates.

Insurance Coverage Comparison

Coverage Feature

QEEQ Full Coverage

Basic Rental Company

Collision Damage Waiver

Fully Covered

$0.00 - $4,930.46

Theft Protection

Fully Covered

$0.00 - $4,372.71

Personal Accident Insurance

Fully Covered

Not Covered

Tire, Window, Mirror Damage

Fully Covered

Not Covered

Roadside Assistance

Fully Covered

Not Covered

Know more About QEEQ Full Coverage

How to Book a Rental Car and Save Money?

Booking smart can easily save you hundreds of dollars on your Iceland road trip, especially for Canadian travelers planning months in advance. Prices for rental cars fluctuate depending on season, location, and demand, so timing and booking platform choice matter.

Booking Tips for lower Prices

Book Early
Reserve your car 3-6 months in advance for better rates and car availability, especially during peak tourist seasons in Iceland.
Save up to 40%
Compare Prices
Use comparison sites like Rentalcars.com or Discover Cars to find the best deals across various providers.
Save up to 20%
Full Tank Policy
Opt for a full-to-full fuel policy, and refill the tank at cheaper gas stations before returning the car.
Save $30-50 CAD
Check Insurance Coverage
Verify if your credit card or travel insurance covers rental car damage before purchasing additional insurance.
Save $10-20 CAD per day

QEEQ's Money-Saving Features

Diamond Membership
Save up to 20% on every booking - free trial available below.
View Details
Price Drop Protector
If your booked car price drops, QEEQ automatically rebooks it at the lower rate and refunds the difference to you.
View Details
One-Dollar Freeze
Lock in today's price with just $1 upfront and pay the rest later.
View Details
Flexible Payments
Pay with credit/debit cards or even cryptocurrency via BitPay.
View Details

What Should You Pay Attention To?

Important considerations and potential issues to watch for when renting a car in Iceland.

Hidden Fees
Watch out for additional charges that may not be immediately apparent.
- Airport surcharges
- Young driver fees
- Additional driver costs
- Seasonal pricing variations
- Extra equipment rentals like GPS or Wi-Fi devices
Insurance Options
Understanding insurance coverage is crucial in Iceland due to variable road conditions.
- Consider coverage for gravel roads and off-road driving
- Check if your credit card provides rental insurance
- Evaluate third-party insurance for better rates
- Inspect terms for deductibles and exclusions
Fuel Policies
Fuel return policies can affect the overall cost of your rental.
- Confirm if the policy is full-to-full or prepay
- Locate gas stations near the return point
- Keep receipts for proof of refueling
- Avoid additional fueling charges for partial returns
Pickup and Return Timing
Scheduling your rental pickup and return wisely can save you money and hassle.
- Plan for airport pickup delays
- Factor in road conditions and travel times
- Ensure business hours align with your schedule
- Understand charges for early or late returns
Road Restrictions
Certain areas in Iceland may have restrictions depending on the vehicle type.
- Verify if the vehicle is allowed on F-roads
- Understand limitations for off-road driving
- Check for seasonal road closures
- Inspect tires for winter conditions

Remember

Being prepared and knowing what to expect can save you hundreds of dollars and prevent stressful situations. Take time to understand all terms and inspect your rental thoroughly.

What Are The Differences Between Canadian and Icelandic Traffic Rules

Canadian and Icelandic traffic rules differ primarily in speed limits, road signage designs, and specific driving etiquette, while sharing common safety mandates like seatbelt use and mobile phone restrictions.

Winter Tires
IS
Mandatory during winter months
CA
Recommended but not mandatory
F-Roads Accessibility
IS
4x4 vehicles required for certain roads
CA
No equivalent restricted road type
Speed Limits
IS
Indicated in kilometers per hour
CA
Also in kilometers per hour but stricter enforcement
Single-Lane Bridges
IS
Common in rural areas, first-come-first-go
CA
Rarely encountered
Mobile Phone Use
IS
Hands-free only
CA
Hands-free only
Seatbelt Laws
IS
Mandatory for all occupants
CA
Mandatory for all occupants
Parking Rules
IS
Follow signage strictly, avoid blocking paths
CA
Similar, with clear signage
Remember
- • Understand and adhere to Iceland's unique road conditions such as gravel roads and one-lane bridges.
- • Familiarize yourself with local signs and symbols, as they may differ from Canadian road signs.
- • Always carry your driving license, rental agreement, and insurance documents.
- • Be prepared for sudden weather changes and adjust your driving accordingly.

Voices of our customers

Frequently Asked Questions

Common questions for travelers from Canada renting a car in Iceland

Can I use my Canadian provincial driver's license (e.g., Ontario G license) to drive in Iceland?

Yes. Any valid Canadian provincial driver's license that uses Latin (English) letters and has been held for at least one year is accepted for car rental and driving in Iceland.

Is it necessary to get an International Driving Permit (IDP) as a Canadian traveler?

Legally, an IDP is not required if your Canadian license is in English. However, it's strongly recommended to get one through CAA for smoother communication in case of an incident or if you encounter a non-English-speaking officer.

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

Most rental companies require drivers to be at least 20 years old for standard cars. For SUVs or 4x4s, the minimum can be 23 or even 25 years old.

Will I be charged a 'young driver surcharge' if I'm under 25?

Yes, almost all companies charge a daily young driver fee for drivers under 25. This should be factored into your rental budget.

What documents do I need to present when picking up my rental car in Iceland?

You'll need: 1) Your valid Canadian driver’s license; 2) Your passport; 3) A physical credit card in the main driver’s name; and 4) Your rental confirmation voucher.

Can I pay or use a credit card under my spouse's or friend’s name for the rental?

No. The credit card used for payment and deposit must be under the name of the main driver listed on the rental contract—no exceptions.

Should I book my rental car in advance or can I get one upon arrival in Iceland?

It’s highly recommended to book in advance, especially during peak travel seasons. Booking ahead on QEEQ typically ensures better rates and availability.

What is the best platform to book a rental car for Iceland from Canada?

QEEQ is the recommended platform for booking your Iceland rental car. It offers competitive rates, comprehensive options, and good customer support.

Are automatic transmission cars widely available in Iceland?

Manual cars are more common and cheaper, but automatics are available. If you require an automatic, book early as they tend to sell out quickly.

Do I need to provide an international phone number when booking a car?

It’s best to provide a reachable number, ideally with roaming enabled, so the rental company can contact you if needed. Some platforms require a phone number for booking confirmation.

Should I rent a 2WD or a 4x4 vehicle for Iceland?

For summer travel (June–August) on main paved roads, a 2WD suffices. For winter driving or if you plan to drive on F-roads (mountain tracks), a 4x4 is strongly recommended or legally required.

What are F-roads, and do I really need a 4x4 to drive on them?

F-roads are Iceland’s highland mountain roads—unpaved, rough, often requiring river crossings. By law, only 4x4 vehicles may enter F-roads, and insurance will be void if you attempt in a 2WD.

Is the Dacia Duster considered a real 4x4 suitable for F-roads?

Yes. The Dacia Duster is a popular entry-level 4x4 in Iceland and is suitable for most F-roads, except those with deep river crossings or extreme conditions.

Is it a good idea to rent a campervan in Iceland?

Campervans are great for summer flexibility and can save time packing/unpacking. However, they are more expensive, require stays at paid campsites, and offer limited space.

Should I choose a diesel or gasoline (petrol) car for my Iceland road trip?

Diesel is usually a bit cheaper and offers better fuel economy for long drives. For ring road trips, a diesel car can help save on fuel costs.

What is CDW insurance, and is it enough?

CDW (Collision Damage Waiver) is basic coverage typically included in rental prices. It comes with a high deductible (often CAD $1,500–3,500). On its own, it’s not sufficient for most travelers.

What is SCDW insurance, and should I buy it?

SCDW (Super Collision Damage Waiver) reduces your deductible significantly (to CAD $200–800). Given Iceland’s unpredictable road conditions, SCDW is highly recommended.

What is Gravel Protection (GP) insurance, and is it necessary?

Yes, GP is essential. Many Icelandic roads are gravel, and flying stones can easily chip paint or crack windshields. Standard CDW/SCDW does not cover this.

Do I need Sand and Ash Protection (SAAP) insurance?

If you’ll be driving along the South Coast, especially near Vík, SAAP is strongly recommended. Wind can whip up volcanic sand/ash, causing severe and costly damage.

Does my Canadian credit card car rental insurance cover Iceland?

Most Canadian credit cards cover basic CDW, but do NOT cover Gravel Protection, Sand/Ash damage, tires, undercarriage, or river crossings. Claims can also be cumbersome and require upfront payment.

What does a 'zero deductible' or 'platinum' insurance package mean?

These premium packages bundle SCDW, GP, SAAP, and sometimes tire protection, lowering your out-of-pocket costs to zero for most incidents. It’s the most worry-free (but costly) option.

Are tires, undercarriage, and river crossing damages insured?

Usually not. Even premium insurance rarely covers tires, undercarriage, or water damage from river crossings. Some companies offer separate tire insurance, but drive carefully regardless.

Is Theft Protection (TP) insurance necessary in Iceland?

Iceland has extremely low crime rates and car theft is rare. TP is often bundled with CDW at no extra charge, so its importance is minimal.

What should I check when picking up my rental car in Iceland?

Take 360-degree photos/videos of the car’s exterior and interior, especially existing scratches or dents. Ensure all damages are noted on the inspection sheet and signed by the agent.

Are there any special checks I should do besides the car’s exterior?

Yes. Check tire condition (including spare), ensure the jack and tools are present, test all lights and wipers, and confirm the fuel tank is full if that's the policy.

Can I pick up or return a car at Keflavik Airport (KEF) at night?

Yes. Many companies offer 24/7 or after-hours key drop services, often via a secure key box. Always confirm the process in advance.

What does ‘Full-to-Full’ fuel policy mean?

You must return the car with a full tank, just as you received it. Failure to do so will result in extra charges at inflated rates.

How does the car return process work in Iceland?

During business hours, staff will check the car for new damage and fuel level. With full insurance, this is quick. For after-hours returns, inspection results will be emailed.

Are rental car offices located inside the airport terminal?

Only a few major companies have desks inside KEF terminal. Most require a short shuttle ride to their office. Check your booking details for shuttle instructions.

What’s different about winter driving in Iceland compared to Canada?

Icelandic winter driving is uniquely challenging due to extreme winds, black ice, and rapidly changing weather. Even experienced Canadian drivers should exercise extra caution.

What are the main Icelandic traffic rules Canadians should note?

Always use headlights, follow roundabout priority (inside lane has right of way), yield at single-lane bridges, never stop on the shoulder for photos, and off-road driving is illegal.

What are the typical speed limits in Iceland?

90 km/h on paved rural roads, 80 km/h on gravel roads, and 50 km/h in urban areas. Speeding fines are high and strictly enforced by cameras.

What should I do if I encounter sheep on the road?

Slow down or stop. Sheep roam freely and may dart onto the road. Hitting one means you’ll be liable to the farmer for damages.

Where can I find the most accurate road and weather updates in Iceland?

Check road.is for real-time road conditions, vedur.is for weather forecasts, and safetravel.is for safety alerts before every drive.

Are gas stations frequent around Iceland? Can I use my Canadian credit card?

Gas stations are common on the Ring Road but sparse in remote areas. Most are 24/7 self-service and accept chip-and-PIN credit cards. Make sure you know your PIN.

How expensive is fuel in Iceland compared to Canada?

Very expensive—often CAD $3–$3.5 per litre. Filling a standard car can cost CAD $120–$150. Budget accordingly.

Are there toll roads in Iceland?

All roads are free except the Vaðlaheiðargöng tunnel near Akureyri. Pay online within 3 hours of passing or face extra fees charged by the rental company.

Is parking easy and affordable in Reykjavik?

Downtown parking is limited and expensive. Zones are color-coded (P1 most costly). Pay via meters or apps like Parka.is. Some areas are free on weekends/holidays.

Can I sleep in my rental car to save on accommodation costs?

No. Wild camping in vehicles is strictly forbidden. You must stay at designated campsites, even if sleeping in a car.

What hidden fees should I watch out for when renting a car in Iceland?

Potential extras include additional driver fees, GPS/child seat hire, airport pick-up surcharges, fuel refill charges, tunnel tolls, and admin fees for traffic violations.

Can I use a Canadian debit card to rent a car in Iceland?

Almost never. A credit card (not debit or prepaid) in the main driver’s name is required for the deposit and payment.

Can I add another driver to my rental agreement?

Yes, but most companies charge an extra fee per additional driver. All drivers must meet license and age requirements and be present at pick-up.

Is GPS necessary for driving in Iceland?

Not essential if you have a smartphone with Google Maps or Maps.me (download offline maps). However, GPS rental is available for convenience.

Do I need to bring my own child seat, or can I rent one?

You can rent child seats from the rental company, but pre-book to guarantee availability. Icelandic law requires appropriate seats for children under 135 cm.

What happens if I get a traffic ticket in Iceland with a rental car?

The fine will be charged to your credit card, plus a processing/admin fee by the rental company. Fines are expensive, especially for speeding and illegal parking.

Can I drive my Icelandic rental car to other countries, like taking a ferry to the Faroes?

No. Rental cars must remain within Iceland. Ferrying to the Faroe Islands or mainland Europe is not permitted.

Are there any seasonal driving restrictions in Iceland?

Yes. Many F-roads are closed from late September to mid-June due to snow and impassable conditions. Always check road.is for current status.

What should I do in case of a breakdown or accident?

Contact the rental company immediately for instructions. For emergencies, dial 112. Always keep your rental agreement and insurance documents handy.

How much should I budget for daily car rental in Iceland?

Budget CAD $70–$200+ per day, depending on vehicle type, season, and insurance. Add fuel, insurance, and extras for a complete estimate.

Can I rent a car for only one day in Iceland?

Yes, but rates for short-term rentals are usually much higher per day than longer rentals. Minimum rental periods may apply during peak season.

What is the cancellation policy for car rentals in Iceland?

Policies vary by provider and booking platform. QEEQ offers clear terms—check your confirmation for free cancellation deadlines and refund conditions.

Still have questions？

Contact QEEQ via online chat or hotline for specific advice. Contact Support

Car Rental in Iceland for Canadian Travelers

Embarking on an Icelandic adventure? Renting a car can be the ideal way to explore the country's stunning landscapes. However, if you're traveling from Canada, you might have a few questions about the process.

Can Canadian Citizens Drive in Iceland?

Ready to Rent?

Which Car Rental Companies Are Best?

Recommendations for Canadian Travelers

How to Choose the Right Car?

Quick Decision Guide

Compare with Confidence on QEEQ

What Are the Popular Destinations in Iceland?

What Insurance Do I Need?

Types of Insurance Coverage

QEEQ's Complete Protection Solutions

How to Book a Rental Car and Save Money?

Booking Tips for lower Prices

QEEQ's Money-Saving Features

What Should You Pay Attention To?

Remember

What Are The Differences Between Canadian and Icelandic Traffic Rules

Remember

Frequently Asked Questions

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