Hire a budget car in Iceland for an affordable trip and explore Reykjavik and the main attractions along the Ring Road!
At Lava Car Rental, we offer a wide selection of economy rental cars for small to large traveller groups in Iceland. Known for their fuel efficiency, these economy rental cars give you the freedom to explore Iceland's diverse landscapes without worrying about excessive fuel costs. Economy hire cars usually have lower rental rates compared to larger vehicles too, making them a cheaper car rental option.
Economy and city cars are the perfect car rental choice for travellers looking to explore Iceland on a budget. Renting a cheap car in Iceland lets you maximise your funds, leaving more money available for other exciting activities during your trip.
Our economy cars are two-wheel drive (2WD), meaning they do not have four-wheel drive (4WD) features that allow you to drive in Iceland’s Highlands during the summer months. But don’t worry, there’s plenty to see elsewhere in Iceland and most attractions are along the Ring Road and completely accessible with a 2WD economy car or city car.
We generally recommend renting 4x4 cars for winter travel outside the capital area, but economy and city cars can be driven all year round. You can explore Reykjavik and neighbouring towns in an economy car, drive around the Golden Circle or book a treatment at the Blue Lagoon spa! Budget car rental in Iceland lets you visit Route 1’s famous natural wonders, including the South Coast waterfalls, Jökulsárlón Glacier Lagoon, Diamond Beach and much more.
Our economy rental cars and city cars let you confidently navigate your way through narrow city streets, reaching your destination in safety and comfort. Not to mention giving you access to tighter parking spots and more mileage to the gallon with superior fuel efficiency.
Finally, our economy rental cars also come equipped with insurance, so you can have peace of mind when driving around the island.
Planning a trip to Iceland and looking for flexible and affordable transport that doesn't compromise on comfort? Save money and book an economy car rental in Iceland today!
The Toyota Aygo is a small city car, and a perfect option to explore Iceland’s countryside and cities on a budget. Compact, fuel-efficient, and comfortable, it seats 4 people comfortably and fits 1 large or 2 small suitcases in the trunk. Travel the Ring Road to see the coast, mountains, volcanoes, and even the glaciers of Iceland with an affordable city car! Complete with Bluetooth, Apple/Android car play, air conditioning, USB, cruise control and a rearview camera. It runs on gasoline. Not suitable for Highlands.
The Toyota Yaris is a little hatchback, perfect for couples and small families visiting Iceland on a budget. Compact and fuel-efficient, it accommodates up to 5 passengers with 1 large or 2 small suitcases. The 2WD vehicle comes with automatic transmission and is equipped with an emergency brake assist, rearview camera, cruise control, A/C, front heated seats, touchscreen, USB and 12V connector, and Bluetooth. It runs on gasoline. Not suitable for Highlands.
The Dacia Sandero Stepway is a compact and comfortable city car, a great option to visit Iceland's countryside and cities on a budget. It seats up to 5 people along with 2 large and 1 small suitcase, perfect for couples or small groups. The 2WD vehicle comes with automatic transmission and is equipped with a rearview camera, cruise control, emergency brake assist, A/C, heated seats, touchscreen, and Bluetooth. It runs on gasoline. Not suitable for Highlands.
The Dacia Jogger is a reliable, comfortable, and spacious family car. It accommodates 5 passengers with up to 3 large and 2 small suitcases OR up to 7 passengers. The 2WD Dacia Jogger comes with manual transmission. It is equipped with essential safety and technology features such as cruise control, parking sensors, A/C, USB connection, and Bluetooth. It runs on gasoline. Explore the main locations along the Ring Road with the Dacia Jogger. Not suitable for Highlands.
The MG EHS is an efficient, comfortable car with a sporty appearance. Spacious, it seats up to 5 people along with 2 large and 2 small suitcases, ideal for couples or small groups visiting the main locations in Iceland. The 2WD vehicle comes with automatic transmission and is equipped with a rearview camera, cruise control, emergency brake assist, A/C, heated front seats, touchscreen, USB and 12V connector, and Bluetooth. It runs on gasoline. Not suitable for Highlands.
The Renault Trafic is an efficient and comfortable 9-person van, ideal for larger groups traveling together in Iceland. Spacious, it can fit up to 8 large and 2 small suitcases. The 2WD van is easy to drive and can get you to the main locations around the island. The Renault Traffic comes with automatic transmission and is equipped with a rearview camera, cruise control, emergency brake assist, A/C, heated driver seat, touchscreen, USB and 12V connector, and Bluetooth. It runs on diesel. Not suitable for Highlands.
Economy cars are affordable two-wheel drive car rental vehicles you can hire in Iceland. Their fuel consumption is very low which makes them easy to drive and perfect for cities. In Iceland, they’re ideal for travelling in Reykjavik and on main roads outside wintertime.
Find out more about economy car rentals in Iceland in our complete guide.
Economy cars are the cheapest car rentals in Iceland and the best transport option for travellers looking to visit Iceland on a budget.
Economy cars are suitable to drive in Reykjavik and on Iceland’s main roads. For gravel roads and detours, we recommend renting 4x4 cars that are better suited to varied terrains...
Economy rental cars can be driven on Iceland’s main roads all year round, but for winter we highly recommend renting a 4x4 vehicle. 4x4 cars or SUVs have higher ground clearance and are more suitable for winter conditions in Iceland.
No, this isn’t possible. Economy cars are two-wheel drive vehicles and are not suitable for the Highlands. Only 4x4 vehicles are allowed on Highland roads. Please take a look at our 4x4 cars category for suitable F-road cars.
Yes, economy cars are safe for driving on paved roads in Iceland in regular weather and road conditions. However, if you’re travelling in the winter season, we strongly recommend renting a 4x4 car for improved safety when driving on ice or snow.
From November 1st to April 15th, all our vehicles are equipped with studded winter tires to ensure optimal safety and traction on icy and snowy roads. For the rest of the year, our cars come with standard tires suitable for regular driving conditions.
