Toyota Yaris or similar | Automatic | 2WD | Small Car Rental

This Automatic Yaris fits a maximum of 5 people and one large luggage at its maximum boot capacity. Considering the cargo space, comfortability and easiness, we recommend minimizing the number of passengers to two or three in the Yaris.

Yaris perform seamlessly on paved roads, especially with Iceland summer road conditions. The Yaris is also fuel-efficient, which means you can better control your fuel re-filling budget, keeping your expense at the lowest cost.

Is It Worth Renting A Small Car In Iceland?

The Toyota Yaris rental in Iceland is a reliable and budget-friendly small car, perfect for short trips between Keflavík Airport and Reykjavík, exploring the capital area, or driving the Golden Circle. Available in both automatic and manual transmission, the Yaris is one of the most popular compact cars in summer, making early booking highly recommended if you prefer the automatic version. Its fuel efficiency and easy handling make it an excellent choice for travelers asking, “Is it worth renting a small car in Iceland?” or “Can you drive a small car on the Ring Road?”

In winter, Thrifty Iceland equips all Toyota Yaris rentals with winter tires, ensuring safety and comfort on Iceland’s icy and snowy roads. While the Yaris performs well on paved roads year-round, it is not allowed on F-roads or in the Highlands, making it best suited for city driving, day trips, and well-maintained tourist routes. For travelers searching for cheap small car rental in Iceland or a compact vehicle for easy parking and fuel savings, the Toyota Yaris is a top pick.

Driving in Iceland

Local and trusted tips

Familiarise yourself with how to drive in Iceland. Get trusted tips from locals with a lot of experience.

4×4 Iceland Car Rental Guide

Do I need a 4×4 in Iceland?

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:

  1. Government Road Tax: The mandatory fee set by the Icelandic Parliament.
  2. 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?

  Our desk is located directly inside Keflavik International airport.

  Just head to the Hertz rental desk in the arrivals hall, and you will be hitting the Icelandic roads in no time. Thrifty is serviced by Hertz Iceland, so everything is in one easy spot and to the highest standard.

  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.