The most popular way to explore Iceland is with a self-drive rental car. This allows you to see the countryside at your own pace and visit secluded locations.
Food and drinks in Iceland are expensive, but you can save money by buying alcohol at the airport duty-free or searching out Reykjavik’s happy hours. Also, please bring a reusable water bottle and fill it up from public taps at accommodations or supermarkets.
Rent a Car
Whether you need to rent a car when visiting Iceland depends on a few things, most importantly, your travel plans and the season. If you’re traveling in the high season, chances are there won’t be enough rental cars to go around. If you do decide to rent a car, make sure you book well in advance. This way, you can choose a wider range of vehicles and insurance options.
It’s also important to remember that car renting in Iceland has its own rules and regulations. Make sure you always drive safely (and don’t let anyone else ruin your trip by putting the brakes on), stay within the speed limit, never drive off-road (this is illegal and comes with huge fines), bring a map or GPS, and have an emergency kit with blankets, first aid kit, and water.
Another thing to consider is that Iceland is a manual-car country, so you’ll need to be comfortable driving a stick-shift car. If you’re uncomfortable with this, it may be best to splurge more on a hybrid or automatic vehicle.
Plan Your Route
When driving in Iceland on a budget, you must plan your route strategically to avoid expensive detours. Zipping around the island’s Ring Road in six days is doable, but you’ll probably have to spend an extra day somewhere along the way. A better option is to break up your drive with a few overnights. On this quick-but-satisfying itinerary, you’d stay overnight in the Skagafjordur area, near Lake Myvatn (ideally in Husavik), at least once along the east fjords (preferably in Seydisfjordur or Hofn); and in Akureyri.
From Akureyri, the quickest way to continue north would be to zip straight to the Troll Peninsula (Trollaskagi). This isn’t recommended, though, as it adds a couple of hours of driving to your itinerary. Instead, take a scenic detour to Siglufjordur, a pleasant little town with an intriguing Herring Era Museum.
After Siglufjordur, drive to the Snaefellsnes Peninsula to visit Hellnar, a surreal rock formation that arches over a lagoon populated by dozens of screeching birds. You can also hike to the top of Saxholl Crater and explore the cliff-top settlement of Arnarstapi. On your final day in the Snaefellsnes, you can stop at Seljalandsfoss waterfall, famous for being one of the few you can walk behind. You’ll also see the tumbling Gljufrabui waterfall. There’s a lovely beach up the coast, too, worth checking out.
Unlike many tourist destinations worldwide, Iceland doesn’t charge admission fees for its most popular attractions. That means you can easily visit many Iceland waterfalls, museums, and other cool sites without spending money on admissions. This means you can save a lot of money by going on an Iceland road trip in the winter, but you’ll have to be prepared for cold weather and snowy roads.
You should also be aware that most of the country’s main roads are single-lane bridges, and playing “chicken” with other drivers is important. The first car to reach the bridge has the right of way, so give them plenty of space to cross before you go. Also, don’t stop in the middle of the road to take photos – you’ll be blocking traffic and potentially endangering other tourists! Instead, look for a pull-off or picnic area to park in and take your photos from there.
A good way to stay local when driving in Iceland is by downloading the free offline maps of the country onto your phone before you travel. This will let you use your GPS without having to pay for data or a roaming plan, and it’ll also be super helpful in case you lose service. Lastly, remember that the speed limit in Iceland is 90 kilometers per hour (about 55 miles per hour), and there are a lot of speed cameras throughout the country.
Rent a Boat
The most important thing to remember when driving in Iceland on a budget is to keep your gas tank full, especially in the winter. Getting stuck in the snow is very easy, and without enough gas to run your engine and keep you warm, you’ll be toast.
Another important tip is to always drive within the speed limit. Iceland uses cameras to enforce its speed limits, and the fines are steep if caught going over.
Lastly, bringing food and water to your road trip is always a good idea. You’ll likely find yourself in some remote areas where the restaurants aren’t quite so convenient, and food is often more expensive than expected.
The most obvious way to save money when driving in Iceland on a budget is by visiting during the off-season. During this time, you’ll experience all the amazing things that make Iceland special at a much more affordable price. Plus, it’ll be easier to see the Northern Lights in all their glory since the nights are longer and there aren’t as many people around.