Quick Answer
The minimum is Collision Damage Waiver (CDW), but Iceland adds two cover types you need to know: Sand and Ash Protection (SAAP) for volcanic debris, and Gravel Protection (GP) for loose road surfaces. Windstorm coverage is also worth considering given Iceland’s weather. Skipping any of these can leave you with a large repair bill after a single dusty stretch.
Read the full guide: Car Rental in Iceland: The Honest Guide to the Ring Road in 2026
Can I pay at fuel pumps in Iceland with a foreign card?
Iceland has many unstaffed, self-service petrol stations, especially outside Reykjavik and on the Ring Road. These require a PIN — a signature-only card will not work. Make sure your debit or credit card has a four-digit PIN before you travel, or carry a card that does. Running out of fuel in the highlands is a serious situation.
How much does car rental in Iceland cost in 2026?
A basic 2WD economy car runs around €60–100 per day in summer (June–August) and €40–70 in the shoulder season. A 4WD capable of F-roads costs roughly €100–180 per day. Iceland is one of Europe’s most expensive rental markets, so budget accordingly and book at least four to six weeks ahead to secure the lowest rates.