Economy Rental Cars in Iceland
Looking for an affordable way to explore Iceland? Renting a budget-friendly economy car is the perfect way to experience Reykjavík, the Golden Circle, and the breathtaking sights along the Ring Road—without overspending.
At Lava Car Rental, we offer a wide range of fuel-efficient economy cars ideal for solo travellers, couples, and small groups. These budget-friendly vehicles come with lower rental rates and excellent mileage, helping you save on fuel while discovering Iceland’s incredible landscapes. Renting a cheap car in Iceland allows you to stretch your budget further, leaving more money for unforgettable experiences—whether it’s relaxing in the Blue Lagoon, chasing waterfalls on the South Coast, or exploring Reykjavík’s vibrant city life.
Our economy cars are two-wheel drive (2WD), making them ideal for Iceland’s paved roads and well-maintained routes. While they aren’t suitable for the rugged Highlands, they’re perfect for visiting the country’s most famous attractions, including Reykjavík, the Golden Circle (Þingvellir National Park, Geysir, and Gullfoss), and the stunning South Coast with its waterfalls, black sand beaches, and glacier lagoons. If you’re travelling in winter outside the capital, we recommend opting for a 4x4 rental for better safety and traction.
Renting an economy car in Iceland offers several benefits: it’s cost-effective, provides superior fuel efficiency, is easy to drive and park, and includes essential insurance for peace of mind. Whether you’re exploring city streets or cruising along Route 1, an economy rental car ensures a smooth and affordable journey.
Book your economy rental car with Lava Car Rental today and enjoy flexible, budget-friendly transport that doesn’t compromise on comfort. Start your Iceland adventure with confidence!
Our Economy Cars
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Included
with our car rentals
- free shuttle service
- new & quality vehicles
- 24 hours availability
- insurances included
- unlimited mileage
- fuel discount
- free cancellation
- studded tires in winter
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WHY RENT AN ECONOMY CAR IN ICELAND WITH LAVA CAR RENTAL?
FLEXIBLE PICK-UP & DROP-OFF
Optional self-service pick-up and drop-off 24/7, day or night, for full trip flexibility.
ESSENTIAL INSURANCE INCLUDED
Drive worry-free with key coverage like TPL, CDW, SCDW, TP, and Gravel Protection.
FREE CANCELLATION
AFFORDABLE, QUALITY CARS
Recent vehicles, maintained to the highest standards and budget-friendly for your trip.
What Our Customers Say About Renting an Economy Car in Iceland
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James Lawrence
23-10-2024* * * * *First time renting with Lava Car and it was great. Excellent communication throughout, convenient location just five minutes from airport and quick pick up and drop off. Vehicle was clean and in good condition (Renault Traffic). I'll be using them again.
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Katie Pegg
10-04-2025* * * * *We had a good experience with Lava. There were clear instructions to get to the shuttle van, which took us to a very nice office to pick up the car.
Loved our Dacia Stepway, perfect car for driving around Iceland. Fuel efficient and came with snow tyres for free.
Staff were friendly and we received plenty of communication ahead of our car rental.
Highly recommend Lava Car Rental! -
Tara Prieur
30-08-2024* * * * *Great experience with Lava car rental. We even had a flat tire and I called company and they had a tire repair place lined up for us within the hour. The car was equipped with a tire repair kit to get us to the repair shop and we were back on the road in less than 1 1/2 hours. I had full insurance so it didn’t cost me anything. It was easy getting to and from the airport (watch the video on how to find the Lava van when you get to the airport). 100% would use them again.
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Pinalysa Cosma
15-05-2023* * * * *Found this company due to its good reviews, and it did not disappoint me.
The process of obtaining and returning the vehicle was simple and fast. Although the office itself is not at the airport, they provide an excellent transfer system to and from the airport. The shuttle picked us up from the airport and drove us to the airport when the car was returned. The office is just about 10 minutes. The staff was very helpful and friendly. The car we got was clean and in a very good state. When I return, I will book the car from them again.
FAQ About Economy Cars in Iceland
What are economy cars?
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.
Why should I rent an economy car in Iceland?
Economy cars are the cheapest car rentals in Iceland and the best transport option for travellers looking to visit Iceland on a budget.
Are economy cars suitable for driving around Iceland?
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...
Are economy cars suitable for Icelandic winter road conditions?
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.
Can I drive in the Highlands in an economy car?
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.
Are economy cars safe for Iceland travel?
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.
What kind of tires does the car have?
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.
