Rent a Cheap Car in Iceland

Hire a small economy car for your Iceland budget trip and explore Reykjavik and other Icelandic cities along the Ring Road! The 2WD small vehicles are the best car rental choices for travellers who are looking to explore Iceland in summer without overspending their budget. With this affordable 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, a 2WD small car will be ideal for you.

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

Our small rental 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 neighboring towns, drive around the Golden Circle or book yourself a treatment at the Blue Lagoon Spa! With a cheap 2WD car, you can visit the most famous Icelandic natural wonders in Route 1 such as the waterfalls in the South Coast, the Jokulsarlon glacier lagoon, Diamond Beach, and much more.

At Lava Car Rental, we have a wide selection of automatic and manual cheap 2WD cars to choose from. You can rent the compact, fuel-efficient Hyundai I10, the reliable and comfortable Toyota Aygo and the new and modern Kia Picanto.

Planning for a short stopover trip to Iceland? Save money and book your Economy car rental in Iceland today!

Our Models

Hyundai i10

Hyundai i10


If you’re traveling to Iceland on a budget, explore Iceland’s countryside and cities with the Hyundai i10 2021. Compact, fuel efficient, and comfortable. Seat 5 people comfortably and fit 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! Complete with Bluetooth, heating, A/C, USB and AUX connectors, and a rear view camera. Check availability today!

  Not suitable for F-Roads.

View info

9.500 ISK

Price includes unlimited mileage

68 EUR | 72 USD | 58 GBP

FAQ About Economy Cars in Iceland

What do you call economy cars?

We call economy cars some small and cheap vehicles you can rent. They usually seat up to four passengers, they are lightweight and 2WD cars. Their fuel consumption is very low which makes them great for cities and they are easy to maneuver. 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 small roads, 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 4WD 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?

Cars have 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 would highly recommend renting a 4WD. It is easier to drive with an SUV or 4x4 in winter conditions in Iceland.