The Hyundai i10 or similar is one of the most affordable ways to explore Iceland. Compact, fuel-efficient, and easy to drive, it’s a popular choice for couples and budget-conscious travellers planning to stick to Iceland’s main roads and popular attractions.
Its small size makes parking in Reykjavík simple, while still offering enough space for a comfortable road trip around the Golden Circle, South Coast, Snæfellsnes Peninsula, and other destinations along the Ring Road.
This vehicle is best suited for two travellers with light luggage and those looking to keep fuel and rental costs low.
Good To Know!
The Hyundai i10 or similar is a 2WD vehicle and is not permitted on Iceland’s F-roads. If you’re planning to visit the Highlands or drive on mountain roads, we recommend choosing one of our affordable 4×4 rental vehicles instead.
Whether you’re visiting Iceland for a weekend getaway or a longer self-drive adventure, the Hyundai i10 offers a simple and economical way to get around.
Why Book with Thrifty Car Rental Iceland?
Thrifty Car Rental Iceland offers reliable vehicles at competitive pricing, making it one of the cheapest car rental options in Iceland without compromising on quality. With practical SUVs and 4×4 rentals suited for Iceland’s changing road conditions, you can explore the country comfortably whether you are driving the Ring Road or heading toward more remote landscapes. Combined with trusted local service and simple booking, Thrifty helps you experience Iceland by car while keeping your travel budget under control.
Driving in Iceland
Familiarise yourself with how to drive in Iceland. Get trusted tips from locals with a lot of experience.
4×4 Iceland Car Rental Guide
What Makes 4×4 the Most Recommended Car Type for Driving in Iceland
FAQ
- Can you drive a small car on the Ring Road in Iceland?
Yes, you can drive a small car on the Ring Road in Iceland, especially during the summer months when roads are clear and well-maintained. Just avoid F-roads and highland areas, which legally require a 4×4 vehicle.
- Is a 2WD small car enough for summer in Iceland?
Yes, a 2WD small car is enough for summer in Iceland, as most main roads and the Ring Road are fully paved and easy to drive. It’s a budget-friendly option for exploring popular routes like the Golden Circle and South Coast.
- What months do I need a 4×4 in Iceland?
You need a 4×4 in Iceland mainly from October to April during the winter months. You also need a 4×4 during the summer if you plan on exploring the highland F-roads.
- What is the new kilometer tax / road tax fee in Iceland?
As of January 1st 2026 the Icelandic government is replacing part of the traditional fuel-based road tax with a usage-based system (“kílómetragjald”), calculated per kilometer driven and adjusted by vehicle weight. All vehicles using Icelandic roads, including rental cars, are required to contribute through this kilometer-based charge to support road maintenance and future infrastructure.
- What is the new kilometer tax / road tax fee in Iceland?
As of January 1st 2026 the Icelandic government is replacing part of the traditional fuel-based road tax with a usage-based system (“kílómetragjald”), calculated per kilometer driven and adjusted by vehicle weight. All vehicles using Icelandic roads, including rental cars, are required to contribute through this kilometer-based charge to support road maintenance and future infrastructure.
- Why is Thrifty Car Rental Iceland charging it?
The tax applies to all standard passenger cars and SUVs under 3.5 tonnes, as well as heavier vehicles in higher weight categories, with rates defined by law for each class. It applies to both Icelandic residents and visitors, including tourists renting a vehicle from Thrifty Iceland for a short stay or a longer road trip such as the Ring Road.
- Is it included in the daily rate?
The Road Tax appears as its own line item at these points:
- On your rental agreement at the check-in desk
- On your final invoice after drop-off
This clear separation helps show exactly what portion of your total cost is the government-mandated tax versus your actual rental service.
The charge applied to your rental agreement consists of two clear parts:
- Government Road Tax: The mandatory fee set by the Icelandic Parliament.
- Thrifty Service Fee: Covers the administrative cost of processing, reporting, and remitting these taxes to the government.
Rate (Per KM) Government Road Tax 6.95 ISK (Approx . 0.056 USD / 0.047 EUR) Thrifty Service Fee 1.40 ISK (+ VAT) (Approx . 0.011 USD / 0.0095 EUR) - Where do I pickup my rental car?
Just head to the Car Rental Shuttle Bus directly outside the terminal. This shuttle takes you to the car rental area just outside of Keflavik Airport. Here you will find Thrifty Car Rental, which is located in the same building as Hertz Car Rental, Dollar Car Rental, and Firefly Car Rental. Thrifty is backed by Hertz Car Rental, which has over 55 years of local experience in Iceland having first opened here in 1971. Bringing decades of experience.
We also have pickups available at Reykjavik Domestic Airport, Akureyri, Egilsstaðir, and Ísafjörður.
- What is your cancellation policy?
In case of a cancellation, the rental needs to be cancelled more than 3 days prior to rental pick up for a full refund.
If a rental is cancelled with less than 3 days notice or in case of no show the full rental price will be charged.
- 3 days or earlier – Full refund
- Less than 3 days – Non refundable
If you need to cancel your prepaid reservation please do so by sending an email to thrifty@thrifty.is stating your name and reservation number.
