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Use the Credit Card

Use your credit card to pay for all or part of the hire and you'll benefit from extra protection.

Section 75 is part of the UK consumer credit act which makes a UK card issuer jointly liable with the supplier for goods or services paid for with the card.

For example if you rent a car and pay in advance on your card and the hire company goes bust, you'll be able to claim the money back from your card issuer.

There are some conditions such as the total amount of the transaction being over £100 but it's worth doing for extra peace of mind.

DVLA Code

Officially, you're supposed to obtain a code from the DVLA before you hire a car. This allows the hire company to look at your licence for any endorsements but in practice, it's not often requested. However as it's free and takes very little time to obtain online, we always take one.

DVLA Code

(External site - opens in new window)

hire car on gravel road in Iceland

Hiring a car in Iceland


If you're travelling to Iceland and want to see as much as possible, hiring a car is the by far the best way to get around to the most popular attractions. If you want to go off the beaten track then a hire car is more or less essential as public transport is very limited outside Reykjavik. Buses are limited to the most popular destinations during the brief summer and Iceland has no railways!

Most visitors to iceland book car hire in advance with the vehicle being collected at or near the main airport at Keflavik. As well as the international Hire companies (Hertz, Avis, Sixt, Budget, Europcar etc.), there are some good local companies.

photograph damage to carWhat is Collision Damage Waiver or Loss Damage Waiver?

Collision Damage Waiver (CDW) and Loss Damage Waiver (LDW) is offered by hire companies to mitigate your risk if the vehicle is damaged while you are hiring it. It means that you won't be held responsible for all the repair costs if a vehicle is damaged while in your possession.

BUT - and this is a BIG BUT...

if there is any damage or loss to the vehicle, you will be liable to pay the first part of the repair or replacement costs. This is known as the excess (or the deductible in the U.S.).

It's common practice with rental companies around the world but in Iceland, the excess is eye-wateringly high!

Have an accident and you could be looking at hundreds of thousands of Icelandic Krona taken off your card!

At 2018 prices, we found several companies with excesses in the region of ISK 200,000 - approximately 1400 GB Pounds, 1550 Euros or 1800 US Dollars and more!

Most hire companies will require you to have an amount of credit available to cover the excess available on your card when you collect the vehicle. Some will 'ring fence' the amount of the excess which means it isn't actually taken off your card straight away but is kept available to the hire company untill the vehicle is returned in good order.

Other companies will take the money off your card and refund it when the car is returned undamaged.

CDW usually won't cover damage to the windows and windscreen, mirrors, exhaust system or wheels and tyres so any damage to them could cost you a lot!

There are also further caveats to be aware of, such as not being covered for off-road driving, damage by ash or sand etc.

Nearly all these risks can be insured against but it can run expensive if you do it when you are picking the car up - it's generally much cheaper if you book in advance or arrange your own extra insurance.

Most car hire collection points have graphic pictures of sand blasted windscreens and dents and scratches to encourage you to think of extra insurance when you collect the car.

Stand alone excess insurance

This type of cover can be worth its weight in gold - it's generally cheap to purchase online and it compensates you for the lost excess if you are charged by the hire company.

The downside is that you still have to pay the hire company the excess yourself and then claim it back. If you do have this insurance, read the claim details carefully and if you are unfortunate enough to claim, take photgraphs and ask for copies of all paperwork, estimates, receipts etc.


checking the hire car What to Check when you're renting a car

When you're renting a car, it's important to check out the condition carefully before you take it away from the rental company.

If you're collecting at night use a torch or the light on your phone to thoroughly inspect the vehicle.

Take a walk around the car and make a note of any existing damage. This can include (but is not limited to) dents, scratches, paint chips, scuffs on bodywork and trim, missing trim, cracked, chipped, broken or scored windscreen, windows or mirrors and damage to wheels, exhausts and tires.

Make sure you check the underside of mirrors and bumpers and look to make sure all is ok with the exhaust and silencer.

Check that the door locks work with the key as well as the fob and that all is ship-shape with the interior - no scuffs, scratches cigarette burns or tears and stains on the upholstery. Finally take a look in the boot (trunk) and also check the spare tire both for damage and to make sure there is one! aside from the wrangling, you don't want to be stuck on a dirt road miles from anywhere with a flat!

If you spot any damage that isn't listed on the hire form, bring it to the attention of the rental company right away. Insist that it's are marked on the hire form.

Finally it's always a good idea to take photographs of the vehicle at this stage. Most phones and digital cameras automatically time and date pictures so it provides you with proof of the vehicles condition at the time of collection.

If you can possibly manage it, return the car when the office is open and get it inspected while you are present. This can prevent a lot of problems arising later. If you have to use a key drop, take pictures of the car before you leave it.


Hiring a car allows you to explore the natural beauty of iceland at your own pace...

Seljalandsfoss waterfall is an easy drive from Reykjavik on the southern ring road. It's a level walk from the parking area to the huge falls. You can walk behind them if you don't mind getting a little wet from the spray. See the people circled above for scale.


Car Hire Scams

Watch out for the following common car hire scams. The worst horror stories may not all happen in Iceland but it never hurts to be on your guard!

  1. That was there when I collected it!
    Number one on the complaints list is customers being charged for damage that they didn't cause. Anything from a dent to scuffs on the bumper can be used by unscrupulous hirers to justify a charge. Check the car out thoroughly as above before you leave the premises.
  2. Avoid scams graphicI always used the fob to lock it
    Not reported in Iceland but apparently common in southern Europe is the hire company claiming on return that the door lock has been forced meaning that the key won't work - requiring an expensive lock replacement.
    How many of us use the key at all, let alone check it on a vehicle we are picking up at the airport?
  3. Beware the free(ish) vehicle upgrade
    If the hire company says the vehicle you booked is not available and offers you a free upgrade make sure there are no hidden costs such as higher insurance, excess etc.
    Ensure that the hire form reflects that you are not being charged extra for anything.
    Bigger isn't always better - do you want to pay more for fuel or would you be happier to get a smaller model and have a refund?
  4. There's no fuel like an old fuel
    The full to empty fuel policy operated by some car hire companies can catch you out. You collect the car with a full tank which you pay for and return it empty.
    If there's any fuel left in the tank, you don't get refunded for it.
    Some companies will offer a partial refund.
    If you are renting on the basis that the car needs to be returned with a full tank, make sure that you fill up before you return it - if the hire company does it, they will charge top dollar for the fuel and possibly a service charge. Many car rental comparison sites will let you filter searches on 'full-to-full'.
  5. Time gentlemen please
    Some rental companies will charge for another full day's rental plus an administration fee even if you're a few minutes late dropping the car off. Make sure you return the vehicle on time.

iceland dirt road

Now...It's time to hit the open road - Happy motoring!

Roads vary considerably in Iceland. The main ring road is well-surfaced and if you're planning on sticking to it or only using routes to the main tourist attractions in and around the 'Golden Circle' you can rent a small compact or saloon (sedan) to save money. If you are travelling away from the ring road and exploring the countryside more, you'll probably need a 4x4 or SUV. Minor roads vary from graded gravel to just plain rocky! If you are planning on going into the wilds, bear in mind that off-roading is not allowed except in specified areas and that your insurance will have exclusions which may result in you paying for damage to your vehicle! Check with your hire company before you go.

icy drive in Iceland

Remember that weather can change frequently and you need to alter your driving to take account of varying conditions and road surfaces. Traffic is light once you're away from the Reykjavik area. There are petrol (gas) stations in most towns and around the ring road. Opening times vary and although there are some pumps which are 24 Hour self service, it's as well to keep your tank topped up when you get the chance - another good reason for full-to-full rentals!

The Icelandic Road and Coastal Administration (IRCA) administers Icelands roads and has loads of great information on driving in Iceland as well as up to date information on road closures and weather conditions affecting driving in Iceland.

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