Iceland on a budget (vol.1)

The ultimate guide to travel in Iceland on a budget. TIPS & TRICKS to save loads of money.

Do you dream about Iceland but the high prices are beyond your budget? Don’t worry dear travellers! Iceland can be done on a budget and your dream definitely can come true. It’s a challenge, but it’s absolutely possible.

You can travel quite comfortably around Iceland without spending your life-time savings. And it can be done several times cheaper than tour operators declare. Luckily, there are some smart strategies, so when you finally check your bank account at the end of the trip, it won’t be as devastated as you thought it would be. In fact, the expenses will be comparable to any other longer trip around Europe. Continue reading to find out how to make it happen.

The ultimate guide to travel in Iceland on a budget. TIPS & TRICKS to save loads of money.

How to get to Iceland the cheapest way?


The cheapest connections between Iceland and other European countries have Wowair, Easyjet and Wizzair airlines. Gone are the days when getting to Iceland was horrendously expensive. Now it can get really cheap. The cheapest flights are generally from London. If you want to hunt up the best offer, check regularly – it will inform you about all great airline promotions.

If you are traveling from the US to Europe, one of the best tricks to reduce the cost of visiting Iceland is to make use of a stopover. Icelandair airlines offer really great prices for flights in between the two continents. They offer free stopovers for up to seven days.


This is a fantastic option for those, who would also love to visit the Faroe Islands or want to travel around Iceland using their own car or motorcycle. The ferry starts from Denmark (Hirtshals), stops on the Faroe Islands for 6 hours, and arrives in the beautiful town of Seyðisfjörður located in the eastern part of Iceland after two days of travel. The lowest prices are, like with everything, after the season. For example, in March and April, it costs around 700 USD (one way, small car with 2 passengers). Taking the ferry has many advantages, especially when you are planning to stay in Iceland for a longer time (3 weeks or longer). Not only will you have your own trusted vehicle, but also you won’t spend any money on renting a car. Moreover, you can take stock of food with you, which is not very cheap in Iceland. Taking a ferry is also a great option if you would like to try living in a van for a while. Of course, you can rent a campervan or a regular van transformed into a campervan in Iceland. However, if you want to spend there more time, it will be much cheaper to bring your own van.

The ultimate guide to travel in Iceland on a budget. TIPS & TRICKS to save loads of money.

Have a look at our original Icelandic fine art prints!

How to travel around Iceland the cheapest way?


You’ve probably heard many unfair gossips about hitchhiking in Iceland, but forget about them now. We can tell you one thing – they are completely untrue. As we’ve written in our guide to hitch-hiking, we have hitched literally thousands of kilometers in Iceland, and each time it was more than amazing. This is a fantastic experience and memorable adventure, however, we have to admit it, it’s an option for more patient people. It’s not for you if you only have a week or 10 days. But if you have two weeks, or even better – three, go for it. Sometimes you must wait for a while, but it’s absolutely worth it. New friends and unbelievable stories heard straight from the locals – priceless. In some countries, you have to pay for a lift, but not in Iceland, so savings are huge. If you still have doubts, Iceland is the safest country in the world.


If you’re not in the mood for hitch-hiking, the best way to travel around Iceland is definitely renting a car. There are many car rental companies, so everyone can find something for himself. There’s a wide selection of cars and of course prices. Traveling in your own car gives you amazing freedom. Hitch-hiking is cool, but sometimes you just want to stop in a place with an astonishing view and relax there, and your just met companion might have some other plans.

The best time to rent a car is off-season (from October to May). And now smile our dear travelers because then you can rent a car for even twice less than in the season. It’s best if you find companions for your adventure. Then you can split the costs and significantly lower the cost of the whole trip. In case of renting a car, the best option is to travel in a group of four. It gets really cheap then.

Before the trip, remember to check if rental companies which interest you have special requirements. In many of them, you should have a driving license for at least a year and you must be over 21. In case of 4×4’s the lower limit can be as high as 25.

The cheapest rental companies are the local ones, for example: SAD Cars, Kuku Campers, Blue Car Rental, Reykjavik Rent a Car. They are really much cheaper than the big international companies. We haven’t heard about any problems with the above ones. Always check the reviews on-line, because some rental companies in Iceland don’t have a good reputation. We’ve heard about tourists losing a lot of money because of some slight damage which they haven’t caused.

You can also rent a car directly from Icelanders using the website It works similar to Airbnb, which you probably have heard about. The prices are similar to local car rental companies in the off-season, but in the season they are even lower. Some people worry what happens if their car breaks down. There’s not much to worry because you will always get help either from the car owner or from Carrenters.

One litre of petrol costs around 200 ISK. Before you hit the road, remember about supplies of gasoline. You can drive even a few hundreds of kilometres without seeing a gas station, so when there’s a chance – refill. Gas stations in Iceland are mostly automatic and using them for the first time might be tricky. Some tourists we travelled with complained about it, so here’s the method. First, you must insert your credit/debit card and type your PIN and only then choose the amount for which you want to fill the tank. When you are done, press the button to print out the receipt. Voila!

Remember to drive carefully. It might be tempting to speed up when you see all these empty Icelandic roads. But these roads are often very treacherous. You never know – a sheep can appear on the road out of the blue. In addition, the fines for speeding are really high, much higher than in other countries. If you get one, your trip will never be on a budget.


At the end a few words about the buses. It might sound strange, but there is no railway in Iceland, so the only public transport is the bus. There are not so many people using them because all Icelanders have cars, and if they want to get somewhere farther, they just take a plane.

If you don’t want to hitchhike and you don’t have a driving license, it will be the only option to move around on the island. The main disadvantages of travelling by bus in Iceland are very high prices and the fact that usually, they don’t stop at tourist attractions. And they don’t run too often. After the season many routes are unavailable. In the summer, a good option is to buy a card that allows for multiple journeys. It is much more cost effective than buying individual tickets. All schedules and prices you can find on the website .

Generally we don’t recommend travelling by bus in Iceland. The fact that they don’t stop at interesting places and rarely run disqualifies them for us. Besides, the buses don’t go to many places. Despite all of this, we have to admit that it is really great that they are. Not once we were really grateful for this. Especially when we were hitch-hiking and suddenly the weather started to go crazy. Believe us – there is nothing more unpleasant than waiting for a car in the middle of nowhere when a storm is raging.

The ultimate guide to travel in Iceland on a budget. TIPS & TRICKS to save loads of money.

In a week expect the second part of our guide. You will get to know how not to go bankrupt when organizing accommodation and food. Stay tuned!

Have a look at the next parts of our guide:

Comments (25)

Thank you for the informative article.
I just returned from 8 Days trip in Iceland where that i enjoyed very much, i got to know from your article that there is a car rental website from locals (which i diidn’t know before) i will deffenetly use it on my next trip to Iceland.

Hi! My boyfriend and I are thinkig about going to Iceland- from Argentina. I don’t have a license and my boyfriend doesn’t feel comfortable driving in a foreign country with the hazards of those routes. What would be your recommendation with the buses? If we buy the passports a round the island, are we going to miss some places? (As you mention in this blog)
Are that dangerous the routes?
We are planning on going for 10/11 days.


I have arrived 1,5 moths ago to Iceland and now I’m working in Reykjavík. If you don’t want to drive (the roads are in really good conditions, you don’t have to worry about that) you can easily hitch-hike, especially around the ring road (the main road, road nr 1), but you can also take the buses. The only local transport is Streato ( as mentioned in the post. It is quite expensive and they stop basically in cities and towns, not at tourist attractions, since these buses is for local people who wants to get from a city to an other. You can also chose different companies to travel with, Sterna, Gray Line, Reykajvik Excursions or Trex. They have one day tours or buses around Iceland, and they do stop at tourist attractions. In the same time, they are more expensive and they run only in high season. Now, almost every of these lines has stopped. It is easier and cheaper if you rent a car, especially if you don’t want to come in high season. If I can help you with anything else contact me: . I’m working at one of the hostels in the capital


Thanks a lot mate. Very soon moving to iceland for a long term period. i will be working over there. It might help here. cheers

I’d love to go to Iceland one day it seems like such a beautiful country! I didn’t know you could do Iceland on a budget. I can’t wait for part II. =)

Great post and thank you for the tips, they are very useful. Thanks!

This is great! I have been wanting to go to Iceland for a while but yes I have to admit one thing holding me back is the cost of the trip. These tips are very useful and the ferry that stops at the Faroe islands sounds like a great option!

Very useful to know! I’m going to Iceland in February, so these tips will prove to be invaluable I’m sure. My flight is already booked, but your tips on transport ring very true – I read somewhere that buses in Iceland are very infrequent. Looks like it’ll be hitching/renting a car for me then!

With or without a budget, Iceland is a country I’m craving for visiting! The main problem I found when trying to plan something is the period when to go, that usually its best it’s the worst for me and my job, and the fact that flying there is never on a budget, at least from Italy. So your tips will be useful for sure, once I decide to spend some money on the flight and finally reach Iceland!

A friend has gone to Iceland on her honeymoon and has been posting pictures ever since. Was already tempted by her pictures and now this post seems most inviting! Iceland, that too on a budget, wow! Not sure how much that would be feasible if coming from India, but I think I should work out the financials soon, and plan a vacation 🙂

These are some useful ideas, especially since Iceland is expensive. I think the bus seems the safest and most comfortable. I am not a big fan of hitch-hiking so would avoid the same. And of course, to get there , no avoiding the plane.

I wouldn’t have thought that you can do Iceland on a budget, due to the extremely high prices. Who knew that winter is actually the low season for Iceland. I would have thought it is a high season due to the Aurora Borealis.

Very informative. We have yet to go to Iceland, mainly because we keep hearing about how expensive it is! Flights alone are out of our price range. We hope to get there soon and renting a car seems like the best option.

We have been looking on Iceland as an option for a trip for quite some time now. The only remaining country here in the Nordics that we have not yet visited. Usually it is the cost calculations that have made us go somewhere else, so thank you for your tips. 🙂

Tried hitchiking in Norway recently with no success. Like you said, this is an option for either people that cant afford to travel differently or for patient people 😀

Renting a car would be my choice. Do they have electric cars over there?

Hi Jure! Electric cars aren’t so popular in Iceland. I’ve seen a few, but I don’t think that car rental companies offer them.

Thanks for this helpful tips but inspite of all these getting to Iceland from India can be an expensive affair. I need to watch out for some good deals in flights.

That’s quite a detailed guide. I like it that hitchhiking is relatively popular and safe option if you’re not self-driving. But what I want to know is, are there motorbike rentals available in the country. I love going on cross-country motorbiking trips so motorbike rentals would be perfect!

Unfortunately, I haven’t heard about motorbike rentals. There are some tourists travelling on motorbikes, but they all bring their own bikes from Europe. Anyway, to experience this country on a motorbike would be amazing 🙂

Congratulation for this cool post! It’s so great to know that you can travel to Iceland without spending a real fortune. It’s a place that I really want to visit one day. Can wait to read vol. II and III ????

Thanks to blogs like these one of the stereotypes regarding Iceland has been broken- that it is a perennially ice-covered country. One of my friends also travelled through this country and now, after reading your post, I am seriously considering of going up there. Unfortunately, there are no flights going to Iceland from India.

Iceland is so amazing. Loved your post and all the details about covering this beautiful country on budget. Thanks for Sharing.

Quite useful tips . Iceland is on my list and this post is really help to plan my holiday finally. Thanks for sharing.

Iceland is indeed a dream but like almost everyone the high prices are what scares me away from all the Scandinavian countries. That is why I was instantly hooked to read the whole article. I had no idea that you can rent a car not through companies but directly from the locals. I think almost every trip can be done cheaper than the tour operators say with some thoughtful research and planning.

Thanks a lot for a guide lke this. I dunno when will make it but when I do, this is the kind of thing I will need. Also, would like to know a bit more about food options. For example, what does a vegan do out there? Is it easy or will he starve?

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