Rent a Cheap Car in Iceland

Book an economy rental car for an affordable trip to Iceland and explore Reykjavik and other Icelandic cities along the Ring Road! The small 2WD vehicles are the best car rental choices for travellers who are looking to explore Iceland on a budget in the summertime. With a cheap Iceland car rental, you can use your money more efficiently elsewhere!

Renting an economy car in Iceland allows you to drive on all paved roads around the country. If you are visiting Iceland during the summer season (from May to early September), as a solo traveller or in a small group of two, or are looking for a cheap rental vehicle in Iceland, a 2WD small car will be the best choice for you.

Small 2WD cars can comfortably seat up to five people plus one large luggage. With the back seats down, the trunk capacity can be expanded and fit more suitcases. Our economy rental cars come equipped with insurance as well, so you can have peace of mind when driving around the island.

Our small economy cars can confidently navigate your way through narrow streets and bring you to your destination in safety and comfort. Not to mention that you can also park in spots that traditional-sized cars can’t and get more mileage to the gallon with superior fuel efficiency.

Explore Reykjavik and neighbouring towns, drive around the Golden Circle or book yourself a treatment at the Blue Lagoon spa! With a cheap rental car in Iceland, you can visit the most famous natural wonders on Route 1 such as the waterfalls on the South Coast, the Jökulsárlón glacier lagoon, the Diamond Beach, and much more.

At Lava Car Rental, we offer automatic cheap 2WD cars in Iceland, being the compact, fuel-efficient and reliable Hyundai I10 our most popular option.

Are you planning a short stopover trip to Iceland? Save money and book your economy car rental in Iceland today!

Our Economy Cars

Hyundai i10

Hyundai i10


Explore Iceland’s countryside and cities and travel on a budget with the Hyundai i10. Compact, fuel efficient, and comfortable, it seats 5 people comfortably and fits 1 large and 2 small suitcases in the trunk. Extend your trip and take it on the Ring Road to see the coast, mountains, volcanoes, and even glaciers of Iceland! Complete with Bluetooth, heated seats, air conditioning, USB and AUX connectors, and a rear view camera. It runs on gasoline. Not suitable for Highlands.

View info

9.500 ISK

Price includes unlimited mileage

69 EUR | 72 USD | 58 GBP

FAQ About Economy Cars in Iceland

What do you call economy cars?

We call economy cars small and cheap vehicles that you can rent in Iceland. They usually seat up to four or five passengers, they are lightweight and 2WD cars. Their fuel consumption is very low which makes them great for cities and they are easy to drive. In Iceland, they are perfect for traveling in Reykjavik and on main roads in summer.

You can read more information about renting an economy car in Iceland in our complete guide.

Are economy cars suited for driving around Iceland?

Economy cars are suitable to drive in Reykjavik and on the main roads in Iceland. For gravel roads and detours, we would recommend renting 4x4 cars that are more suitable.

Can I go into the Highlands with this type of car?

No, you can't. Economy cars are 2WD vehicles so they are not suitable for the Highlands. Only 4x4 vehicles are allowed on those roads. We invite you to check out our 4x4 cars category to rent a suitable car for F-roads.

What sort of tires do economy cars have?

Economy cars come equipped with winter tires from November to April and summer tires for the rest of the year.

Are the economy cars suitable for Icelandic winter road conditions?

Economy cars are small and 2WD. They can be driven on the main roads all year long but, for winter, we highly recommend renting a 4x4 vehicle. It is easier to drive with a 4x4 or SUV with higher clearance in winter conditions in Iceland.