Iceland Car Rental Age: Minimum Requirements, Rules & Surcharges in 2025

If you think you can rent a car in Iceland just because you have a license, then you should think again. Our rules aren’t a little different from what you might have expected. From age restrictions to sneaky young driver fees, there's a lot you might or might not be aware of. 

Iceland’s car rental age varies a lot depending on which company and vehicle you choose. If you’re looking for a snazzy 4x4, then the picture changes completely. In this article, you will get the full scoop on what to expect without the other nonsense others are trying to feed you. 

We’ll tell you about the minimum age, hidden surcharges, and which cars you're actually allowed to drive. Let’s clear up a few things before you book.

How Old Do You Have to Be to Rent a Car in Iceland?

Let’s be honest. The legal driving age in Iceland starts at the age of 17. However, that doesn’t mean youngsters will be able to rent a car in Iceland automatically just because they’ve got a driver's license. 

Legal Driving Age vs. Rental Age in Iceland

Now that you’re aware of the fact that you are allowed to drive in Iceland at the age of 17 (obviously only if you have a driver’s licence), you should also keep in mind that this rule applies to locals and foreigners driving their own vehicles. Iceland’s car rental age usually starts at the age of 20. But, even then, you might still get wacked with extra fees or limitations on your insurance. 

Standard Minimum Age Across Rental Companies

So, how old do you have to be to rent a car in Iceland without running into blocks? Most agencies go with 20 as the base age for small cars. Think compact models and sedans.

Want to upgrade to a 4x4, campervan, or SUV? Then the age to rent a car in Iceland usually jumps to 23. Some go as high as 25, depending on the model and the rental company.

There are rare cases where 18-year-olds can rent. But expect higher fees, limited car options, and stricter insurance terms. It's not the dream deal it sounds like.

Know your age, know your options, and always read the fine print before booking.

Age Rules by Vehicle Type

Vehicle Type	Minimum Age	Additional Notes
Compact Cars	20 years	Requires a valid license held for at least 12 months
SUVs & 4x4 Vehicles	23–25 years	Higher age due to Iceland's challenging road conditions
Motorhomes	25+ years	Strict requirements due to vehicle size and insurance risks
Luxury Cars	25 years	May require a clean license held for at least 3 years; surcharges for younger drivers

Car Rental Policies by Age Group in Iceland

Not all rental companies treat age the same way, and if you're under 25, you’ll feel it in your wallet. Let's break down Iceland’s car rental rules by age group so you know exactly what to expect before picking up the keys.

Renting a Car at 18–20 Years Old

Yes, you can rent a car at 18. But only with a handful of companies, and the selection’s tight. You’ll be limited to small economy cars like the Toyota Aygo or Kia Rio. That freedom comes at a cost, too. 

You’ll also want to look into car rental insurance for young drivers in Iceland, as coverage requirements can be stricter and sometimes more expensive for those under 25. Most rentals tack on a young driver fee that ranges from $10 to $30 per day. If you choose Cars Iceland, know that we don’t charge a young driver fee but you must meet certain conditons.

At 19, things open up a little. A few more vehicle types become available, but the fee doesn’t go away. You’ll also need to show that you’ve had your license for at least a year. If not, you’re out of luck.

For most companies, the minimum rental car age in Iceland is 20. That’s when you start to see real options like compact sedans. If you're under 20, the answer is usually no.

What Changes at Age 21?

Once you hit 21, the rules change again, especially when you're renting a car under 25 in Iceland. You will now get access to a broader range of cars, including intermediate models. But don’t assume the fees disappear. Some companies still charge young driver surcharges until you turn 25.

That said, others start cutting you some slack. Surcharges might be lower or dropped entirely depending on who you rent from. It's still not cheap, but it's better than being 19 with limited choices.

Drivers Aged 25+: Benefits and Fewer Restrictions

At 25, you will finally be treated as a more responsible driver. All the age restrictions vanish. You can rent anything from a luxury car to a campervan without the annoying extras. No more young driver fees. No more limited vehicle categories. Most companies even offer better insurance terms and ask for less paperwork.

So while the age to rent a car in Iceland might technically start at 18, the real perks don’t kick in until 25.

Young Driver Surcharges in Iceland

By now, you should have clicked that in Iceland, if you’re under 25, you’ll be paying extra. We know you might think ‘the world is unfair.’ But that’s the harsh reality of Iceland’s driving age, which works like everywhere else. Rental companies love adding hidden fees, and if you're young, you're exactly the target.

What Is a Young Driver Fee?

A young driver fee is just what it sounds like. It’s a daily charge slapped onto your rental if you're under 25. Why? Because younger drivers are seen as more likely to file insurance claims. Take, for example, a study in China that confirmed this claim. 

The study indicated that young drivers were responsible for 14.07% of road deaths. Doesn’t matter if you’re a cautious driver or just turned 24 and nine months. If you're under the line, you’re paying.

This fee applies to both the main driver and any additional ones who haven’t hit 25 yet. It's not optional, and it's not small.

Average Costs by Company

Here's what different companies in Iceland are charging right now:

• Nordic Car Rental charges $15 per day for anyone aged 20 to 25.
• Key Car Rental goes up to $27 per day for under-25s.
• Reykjavik Cars? Zero surcharge. If you're under 25 and trying to save, they’re a great choice.
• Most others sit somewhere between $10 to $30 per day. Always check the fine print before you book.
  
  

How to Avoid or Reduce Young Driver Fees

Yes, there are ways to beat the system. Or at least pay a bit less.

• Book with rental companies that skip the fee. Iceland Cars and Reykjavik Cars are among the few that don’t charge extra for young drivers.
• Stick with smaller cars. Economy models usually come with lower fees and cheaper insurance.
• Look for package deals. Some companies throw in a car with your accommodation or tour. It won’t erase the fee, but it might offset it.
• Ask about insurance upgrades. Sounds weird, but if you agree to full coverage, some places will drop the surcharge entirely.

License & Driving Experience Requirements for Renting a Car in Iceland

You’ll need more than just a valid license. Rental companies have specific rules around documents and experience, and missing a detail could mean no car for you. Let’s break it down so everything goes smoothly when you pick up the keys.

Accepted Driver’s Licenses by Country

Let’s start with the basics: your license has to be valid, clearly state your info, and be readable. If it ticks those boxes, here’s how things usually pan out:

• EU/EEA licenses are fully accepted. No extra documents, no extra drama. Just make sure yours has a photo and hasn’t expired.
• US and Canadian licenses are also good to go. No need for an International Driving Permit (IDP) as long as the license uses Latin letters.
• Australia, New Zealand, India, Hong Kong? You're covered too. But only if your license is in English or Latin script. If it’s not, you’ll need an IDP.
• Non-Latin alphabet licenses from places like China, Russia, or Japan? You’ll need to carry either an IDP or an official translation to rent a car.

For more on specific rules, check out this guide on Iceland's accepted driving licenses and rental requirements.

Is an International Driving Permit (IDP) Required?

You won’t need an IDP if you’re from the EU/EEA, North America, or a country where licenses are issued in English or Latin script. But if your license uses a non-Latin alphabet, like for example Arabic, Chinese, Japanese, etc, you’ll need to pair it with an IDP. Iceland follows the 1949 IDP version, so make sure you’re carrying the right one.

Minimum Driving Experience Needed

The Iceland car rental age might get you through the first door, but that’s not the whole story. You also need driving experience. Most rental companies ask for at least 12 months on the road. No experience, no car. And if you’re eyeing a big SUV or a campervan, some companies want to see at least 3 years behind the wheel.

So while the driving age in Iceland may be a bit younger than in some other countries, rental companies expect more than just a fresh license. Be ready with the right paperwork and the right amount of experience, or you’ll be stuck watching Iceland from the passenger seat.

Insurance Policies Based on Age in Iceland

Let’s talk insurance. Not the boring kind buried in fine print, but the kind that actually matters when you're behind the wheel in Iceland. Rental companies don’t mess around here, and the type of coverage you get and need can shift depending on your age.

Mandatory Insurance Coverage in Iceland

Every rental car in Iceland comes with a few basic protections baked in, whether you ask for them or not.

• Third-Party Liability Insurance (TPL) is the big one. It’s legally required and covers damage you cause to other people or property. Good news? It’s always included in your rental, no extra charge.
• Collision Damage Waiver (CDW) is also standard. It limits how much you’ll have to pay if your rental gets damaged. But don’t get too comfortable. The deductible can still be steep unless you upgrade to a Super CDW. That’s where most travelers end up spending a little more for peace of mind.
• Then there's Driver Accident Insurance, which covers personal injuries to the driver. It's not optional. Rental companies include it by default because, well, accidents happen.

For a full breakdown of what’s covered, what’s not, and how to upgrade, check out this complete guide to car rental insurance in Iceland.

Additional Insurance for Younger Drivers in Iceland

If you're under 25, renting a car in Iceland isn’t just about picking a vehicle. It’s about protecting yourself from the kind of surprise expenses that can ruin a road trip. Harsh weather, gravel roads, and wild wind are a real reality and hazard. That’s why younger drivers are strongly encouraged to beef up their coverage.

Super Collision Damage Waiver (SCDW)

The standard Collision Damage Waiver only gets you so far. If you're under 25, you’re already seen as a higher risk, so the deductibles are no joke. Upgrading to Super CDW can seriously cut down your liability. It’s not cheap, but neither is paying thousands for a dented fender.

Gravel Protection (GP)

Iceland’s gravel roads are rough on cars. Cracked windshields and chipped paint are way too common, especially if you're new to the terrain. Gravel Protection helps cover that kind of damage. It’s a smart add-on, and one you’ll be thankful for the minute you hit the highlands.

Sand and Ash Protection (SAAP)

Heading to the South Coast or anywhere near open plains? You’ll want this. Iceland’s volcanic landscape kicks up fine ash and sand in high winds, and it can destroy a car’s paint job in minutes. Sand and Ash Protection keeps you covered when Mother Nature starts acting up. Younger drivers might not have experience navigating in those conditions, so it’s better to be safe than sorry.

Curious what happens if you crash your rental? It’s not just about calling roadside assistance. Read this guide on what to do after a car accident in Iceland so you're not caught off guard.

Age-Based Insurance Limitations

Being under 25 can affect more than just the price tag. Many rental companies:

• Assign higher deductibles to younger drivers
• Limit access to high-end vehicles, large SUVs, or campervans

Age Requirements by Car Rental Company in Iceland

Not all rental companies play by the same rules, especially when it comes to younger drivers. Some are chill. Others? Not so much. Here's how age requirements stack up across the most popular car rental brands in Iceland.

Cars Iceland

You’ll need to be at least 20 to rent a regular car. Thinking of going off-road? Then you’re looking at 23 to 25, depending on the model. We don't charge a young driver fee if you're under 25. No surprises there. Just make sure you've had your license for at least a year. If you’re under 23, don’t expect access to the bigger vehicles.

Reykjavik Cars

Here, things are a little more forgiving. You can rent most vehicles at 20, and the larger stuff like SUVs or vans becomes available at 23. The standout perk? No young driver fee. That makes it one of the better choices for anyone under 25 trying to save cash. You still need a license that’s at least one-year-old.

Iceland Cars

This one starts at 21 for basic rentals. SUVs and campervans are off-limits unless you're 23 or 25, depending on the supplier. If you’re under 25, expect a fee. It changes based on who you're renting from, but younger renters usually pay more. Like the others, you’ll need at least a year of driving experience and possibly more if you're going for premium vehicles.

Want help picking the right size ride for your trip? Here’s a comparison of standard vs. full-size car rentals in Iceland that breaks it all down.

Rental Company	Minimum Age	Young Driver Fee
Cars Iceland	20 years	Yes
Reykjavik Cars	21 years	No
Iceland Cars	20 years	Yes

Tips for Young and First-Time Drivers in Iceland

Renting a car in Iceland for the first time? Under 25? You’ve got a few extra things to think about. Age-based restrictions, limited car access, and Iceland’s not-so-gentle road conditions can all catch you off guard if you’re not prepared. Here’s how to make your trip smoother from the start.

Book Early to Avoid Restrictions

Younger drivers don’t get as much choice, especially when it comes to 4x4s or more luxurious cars. If you wait too long, the most youth-friendly rentals are usually the first to go. Booking early doesn’t just guarantee better prices. It also gives you more options and helps you avoid last-minute surprises. Need more planning tips? This guide to driving in Iceland is a must-read.

Choose Cars That Allow Younger Drivers

Not every vehicle is available to everyone. Some companies won’t let under-25s near a luxury SUV or a van, no matter how much you're willing to pay. Compact cars and small sedans are usually fair game, and they’re easier on your budget too. Double-check the rental terms before locking anything in. If it’s not spelled out clearly, ask.

Know the Roads: F-Road Rules and 4x4 Needs

Thinking of exploring Iceland’s highlands? Then you’ll need to understand F-roads. These rugged, often unpaved mountain roads are only accessible by 4x4s. That’s not a recommendation, it’s the law. 

And younger drivers may not qualify to rent the required vehicle. Even if you do, these roads are no joke. There will be river crossings, steep climbs, and zero cell service in some areas. This breakdown of F-road rules and 4x4 requirements will help you figure out what you're getting into.

Frequently Asked Questions (FAQs)

Can I rent a car in Iceland if I’m under 21?

Yes, but options are limited. Most companies require you to be at least 20. Expect higher fees, fewer vehicle choices, and stricter insurance conditions.

Do I need a credit card to rent a car as a young driver?

Usually, yes. Most rental companies require a credit card for security deposits, especially for drivers under 25. Debit cards are rarely accepted unless pre-approved by the company.

Are there rental options for 18-year-olds in Iceland?

A few companies allow it, but don’t expect much. You’ll be limited to compact cars, face daily surcharges, and must have held a license for at least one year.

Does age affect what cars I can rent?

Absolutely. The younger you are, the fewer options you get. SUVs, 4x4s, and campervans are usually restricted to drivers 23 and older with more experience.

Final Checklist: Are You Eligible to Rent a Car in Iceland?

Make sure you’ve got all the basics covered before booking. Tick off each box below to avoid surprises at the rental desk.

☐ Age – You meet the minimum age for your rental type (usually 20+).
☐ License – Your driver’s license is valid, readable, and at least one year old.
☐ Card – You have a credit card in your name for the deposit.
☐ Experience – You’ve been driving for at least 12 months (more for premium vehicles).

What the Iceland Car Rental Age Really Means for You

Still unsure about the Iceland car rental age or what’s best for your trip? Don’t overthink it. If you meet the basic age, license, and card requirements, you’re ready to go. We’ve made the rules simple so you can focus on the fun part (exploring Iceland). Ready to hit the road? 

Rent a car in Iceland through us now. Got a question before you book? Reach out. You’ll get real help from real people who know the roads, the rules, and how to get you rolling.