Money-Saving Tips for a Road Trip in Iceland

Iceland on a budget

So you’ve always want­ed to go on a road trip in Ice­land but you don’t want to blow your bud­get too much. Well, you’re in luck! Hav­ing done Ice­land on a bud­get before, I have a few prac­ti­cal tips to share that you might find use­ful in your trip-plan­ning. They’re all based on com­mon sense, real­ly, so I wouldn’t claim them to be mind-blow­ing. :-)

Air­fares, accom­mo­da­tions, car rental, gas, and food are usu­al­ly the costli­est parts of a road trip. If you spend less mon­ey on those sec­tors, you could poten­tial­ly stretch your bud­get fur­ther which in turn would allow you to stay in Ice­land longer to see more of this amaz­ing coun­try. Trust me, you want to stay longer. We spent two weeks on our first road trip around Ice­land and we still wished we could’ve stayed longer!

Time of Visit

Air­fares, car rentals, and accom­mo­da­tions tend to cost less in the off-sea­son, any­where in the world. Ice­land is no excep­tion. Off-sea­son in Ice­land is typ­i­cal­ly from Octo­ber to April (basi­cal­ly win­ter). For the longest day­light hours in win­ter and a chance to see the North­ern Lights (if you’re lucky), I would sug­gest you go in Octo­ber or April. Longer day­light hours allows you to spend more time dri­ving and sight­see­ing on your road trip so you’ll be able to dri­ve far­ther and/or see more attrac­tions. And who doesn’t want to see the North­ern Lights? On the down­side, some attrac­tions will be closed for the sea­son but most attrac­tions are open all year.

We went in May because in 2013, the month of May was still con­sid­ered an off-sea­son month. Unfor­tu­nate­ly, as Ice­land became a more pop­u­lar tourist des­ti­na­tion, it’s now con­sid­ered as part of the high-sea­son by the Ice­landic tourism indus­try. We do feel very lucky to have had the chance to vis­it Ice­land before the big tourism boom. 


WOW air offers low air­fares to Ice­land, but they do come with a catch: you’ll have to pay extra for every­thing but a car­ry-on. I won’t go into the details but Air­fare­watch­dog has list­ed the pros and cons of fly­ing with Wow air, if you’re inter­est­ed. Any­way, if you learn to pack light and plan to do laun­dry every cou­ple of days or so dur­ing the trip, you can cer­tain­ly take advan­tage of the deals they offer and trav­el with just a car­ry-on. We always go with Ice­landair because we think their fares are fair for what we get (one checked bag­gage, one car­ry-on, one handbag/personal item, free soft drinks on board) and in the 6 times we flew with them, we always had a good expe­ri­ence. It’s just a mat­ter of pref­er­ence.

Here’s a lit­tle tip: Icelandair’s econ­o­my fares don’t fluc­tu­ate much all year but some­times they do go low­er. To catch the low­er fares, set up a price watch for your pre­ferred trav­el dates on Google Flights. You will receive a noti­fi­ca­tion email from Google when the price changes. When you think the price is right, book the flights and pats your­self on the back. :-)

For WOW air, the best way to catch their best fares is by join­ing the WOW air club. They fre­quent­ly have a sale and they will let you know about it through email if you’re on the club’s mail­ing list.

Car Rentals and Gas

Our trick for a cheap­er car rental is to always rent the small­est car avail­able. Not just because of the low­er cost but also because small­er cars tend to be more fuel-effi­cient. You won’t need to refu­el as many times as you would a big­ger car so you’ll spend less on Iceland’s very expen­sive gas.

How­ev­er, there is a catch. In the off-sea­son, the weath­er can be quite unpre­dictable and Ice­land is prone to gale force wind. Small cars can be hard­er to steer when it’s super windy so please dri­ve care­ful­ly and accord­ing to weath­er and road con­di­tion, and maybe buff up your steer­ing arms a bit before the trip. :-) Also make sure your rental car has its win­ter tires on, and please do stay on the ring road or paved roads when dri­ving a small car in the off-sea­son. It’s for your own safe­ty.

To save you from hav­ing to pay for the air­port shut­tle busses to Reyk­javik and then back to the air­port at the end of your trip, pick up your rental car from the air­port if pos­si­ble and return it to the same loca­tion on your way home (return­ing to a dif­fer­ent loca­tion usu­al­ly costs you extra). It will also make your life a lit­tle eas­i­er, I promise! 


This is the area where you need to do a lot of research and price com­par­isons through online book­ing engines in order to find the best deals. When you did find a hotel with the best deal through a book­ing engine, make sure you vis­it the hotel’s web­site and see if you can get a bet­ter deal by book­ing direct­ly. Book ear­ly because the least expen­sive accom­mo­da­tions will get booked fast. You also need to make sure that the accom­mo­da­tion cost includes break­fast. Hav­ing break­fast includ­ed is a mon­ey-saver and con­ve­nient.

Camp­ing, obvi­ous­ly, will save you even more but I wouldn’t rec­om­mend it in the off-sea­son when the weath­er tends to be less than friend­ly. If you sign up for a Hostelling Inter­na­tion­al mem­ber­ship and don’t mind stay­ing in a dor­mi­to­ry-style room with oth­er trav­ellers, or a sin­gle room if you trav­el solo, it can be a good way to save mon­ey. Dou­ble rooms in hos­tels, how­ev­er, are not quite bud­get-friend­ly in my opin­ion as they seem to cost as much as a bud­get hotel dou­ble room, if not more (cor­rect me if I’m wrong).

In Reyk­javik, unless you can find a bud­get hotel room with a decent rat­ing (we’ve nev­er had much luck with it in our two vis­its), you’d be bet­ter off stay­ing at an Airbnb. If you choose to rent a pri­vate room instead of an entire home, it can be cheap­er than a Reyk­javik hos­tel room and you’ll get to stay with a local or a local fam­i­ly. Some small­er, entire home can be quite afford­able as well, and they usu­al­ly come with a kitchen. Being able to cook your own food will save you mon­ey because eat­ing out is expen­sive any­where in Ice­land.

If you don’t have an Airbnb account yet, sign up using our refer­ral link to receive a CA$50/US$40 cred­it to spend on your first stay. You’ll also help sup­port this site because we’ll get some cred­its too for our future trips!

Food and Drinks

As men­tioned above, book­ing accom­mo­da­tions that include break­fast is a good way to save mon­ey. If you stuffed your­self at break­fast, you could prob­a­bly get by with hav­ing only snacks for lunch. When we’re on a road trip, one of the first places we vis­it is usu­al­ly the local gro­cery store. We would put togeth­er a “good­ie bag” full of snacks like pota­to chips and choco­late bars, fruits like bananas and apples, and the sta­ples: bread and but­ter. Go to Bonus, Net­to, or Kro­nan super­mar­kets for the low­est prices.

If you real­ly have to eat out, research the restau­rant before­hand and check out the menu online, if pos­si­ble, to see how much it would cost. That way you avoid get­ting a stick­er shock. It also allows you to decide whether it’s with­in your bud­get to eat there, or if eat­ing out of the “good­ie bag” is a bet­ter option. Hot dogs, sandwiches/wraps, piz­za, and fish and chips are among the least expen­sive food in Ice­land.

We enjoy vis­it­ing local bak­eries when we trav­el for a taste of local pas­tries and good­ies. I would strong­ly rec­om­mend a vis­it to any bak­ery in Ice­land. Baked goods are usu­al­ly inex­pen­sive and would make good snacks or even a light meal. My favourite Ice­landic pas­try is called kleina, a knot-shaped donut. Can’t get enough of them! :-)

As for drinks, always pack your own reusable water bottle(s) when you trav­el to Ice­land and nev­er buy bot­tled water. Ice­land has one of the best qual­i­ty drink­ing water in the world and you can get it for free out of the tap. For alco­holic drinks, be sure to buy them from the duty free shop at the Keflavik air­port when you arrive because alco­hol is very expen­sive in Ice­land. Or bet­ter still, don’t buy alco­hol at all! 

Tours and Activities

Orga­nized tours and activ­i­ties in Ice­land are what I would call lux­u­ry items because they tend to be quite expen­sive and would usu­al­ly cost over $100 per per­son. But some­times you just have to take a tour or an activ­i­ty no mat­ter how much they cost because it’s been on your buck­et list for­ev­er and that is all right. Con­sid­er it a reward for watch­ing your spend­ing. You might want to plan ahead and decide which tours or activ­i­ties you’d like to splurge on and then stick to the plan. A vis­it to the Blue Lagoon was one of the two lux­u­ry items we splurge on on our first trip. The oth­er splurge was on a lopa­peysa, the tra­di­tion­al Ice­landic hand­made wool jumper. No regrets on both accounts.

If the whole trip plan­ning thing sounds too daunt­ing, you might want to con­sid­er book­ing a self-dri­ve tour from Hey Ice­land. I think their prices are quite fair, espe­cial­ly in the off-sea­son, and they do have some bud­get options. Plus, almost all of the accom­mo­da­tions in their net­work include break­fast. We booked some of our accom­mo­da­tions through them on our first Ice­land road trip and were not dis­ap­point­ed. They’re also spon­sor­ing our next Ice­land road trip in Octo­ber this year (full dis­clo­sure!) but I wouldn’t have rec­om­mend­ed them if we hadn’t used and been sat­is­fied with their ser­vice in the first place. :-)

Well, I hope this post helps you a lit­tle bit in mak­ing your Ice­land on a bud­get dream a real­i­ty. If you have any ques­tions, please ask away in the com­ment area and I’ll try to answer the best I can. Also, if any­one has any oth­er tips to add to the list, please feel free to share. Hap­py trip-plan­ning!

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