Renting a car is expensive in Iceland. Besides the basic rental fee, there's mandatory insurance, pricey gas, and 25.5% value added tax.
Route 1 (the "Ring Road") that completely circles Iceland is paved. So are most of the roads in greater Reykjavik. Unfortunately, a large percentage of the other roads are unpaved. For many of them, you need a 4-wheel-drive vehicle.
Gas stations can be few and far between in Iceland's hinterland. So try to keep the tank at least two-thirds full.
Most road signs beyond Reykjavik are in Icelandic without helpful translations to English or other foreign languages.
If the above drawbacks don't concern you, do rent a car. Iceland's natural beauty is perfect for road tripping.
Most of Iceland's well-populated areas are well-serviced by public buses.
Reykjavik bus routes and schedules can be confusing to out-of-towners. And change is not given.
For tips on airport busses, visit my Flying to Iceland web page.
They're expensive for most vacationers' budgets. For instance, a one-way trip from the international airport to the capital city Reykjavik will set you back about $110 dollars or 90 Euros.
The good news is they are metered and have set official rates in Reykjavik (meaning hassle free). And tipping is not expected.
Rates increase at night and taxi availability becomes scarcer.
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