Iceland on a Budget: Planning a road trip

Wanting to visit Iceland on a budget? We share how you can plan the perfect road trip in Iceland, without overspending.

Iceland offers an unforgettable road trip experience with its diverse natural wonders and wide-open spaces.

Traveling by car is one of our best Iceland travel tips, as it provides freedom to explore stunning waterfalls, rugged coastlines, volcanic fields, and geothermal areas at your own pace. A budget road trip here is both practical and rewarding, as there are many ways to control expenses while still enjoying the country’s unique attractions. 

Driving allows access to less crowded spots and flexible scheduling, helping you make the most of every moment. Exploring Iceland on a budget encourages creative planning and opens up opportunities to experience authentic local culture and nature without overspending.

Iceland on a Budget

Budget Accommodation Options

Budget accommodation in Iceland offers several affordable options suitable for travelers mindful of expenses. Campsites provide a practical choice for those equipped with tents or campervans, often situated in scenic locations that bring you close to nature without high costs.

Guesthouses and hostels present comfortable alternatives with shared facilities and opportunities to meet fellow travelers, often positioned near towns or popular routes.

Tips for getting the best deals:

• Booking early and using comparison platforms helps secure the best prices for these accommodations.
• Flexibility with travel dates can reveal additional savings, while checking directly with providers may uncover special offers.
• Campervans and tents serve as excellent tools to reduce lodging expenses by combining transportation and overnight stays into one solution. This approach suits those who prefer independence and a closer connection to Iceland’s outdoors.

Along the Ring Road, several budget-friendly stops stand out. Campsites near Þingvellir National Park, Skaftafell in Vatnajökull National Park, and the Westfjords region offer good value. Hostels in towns like Akureyri and Vík provide economical bases for exploring the surrounding areas.

By selecting these options, travelers can enjoy Iceland’s diverse environments while keeping accommodation costs manageable.

When planning a budget road trip across Iceland, eliminating the cost of nightly accommodation unlocks far greater travel flexibility. Camper vans in Iceland outperform hotels and hostels by combining transport and lodging into a single, cost-efficient rental.

Choosing a vehicle from a company like CampEasy means you don’t just save money, you gain access to remote landscapes where conventional stays don’t even exist.

Choosing the Right Vehicle for your Iceland Road Trip

Choosing the right vehicle is essential for an Iceland on a budget roadtrip, exiling one of the best Europe road trips there is. Economy cars provide a cost-effective option, offering fuel efficiency and easy handling on paved roads.

For travelers seeking flexibility with accommodation, campervans combine transportation and lodging, reducing the need for extra expenses on hotels or guesthouses. Compact SUVs are also popular, especially for rougher terrain, but they typically come with higher rental and fuel costs.

Securing affordable rental deals often starts with early booking, which helps access better rates and availability.

Comparing prices across multiple websites highlights the best offers, including discounts or package deals. Some rental companies offer promotions during off-peak seasons that can significantly reduce costs.

When choosing insurance, basic coverage usually covers essential risks. Additional coverage options may be selected based on comfort level, but a careful review of terms can prevent unnecessary expenses. Checking what the rental includes can help focus spending on the most relevant protections.

Fuel efficiency plays a large role in managing trip costs. Smaller vehicles generally consume less fuel, which suits long drives around Iceland’s main roads.

Planning routes with shorter distances between stops contributes to lower fuel use. Paying attention to the fuel type recommended by the rental company avoids extra charges and mechanical issues.

How to save money in Iceland

Travel in the off-season – Visit between late September and April for cheaper flights, accommodation, and tours.

Book flights early – Icelandair and Play often have seasonal sales.

Use budget airlines and stopover deals – Take advantage of Icelandair’s free stopover option between Europe and North America.

Stay in hostels, guesthouses, or Airbnbs – They’re much cheaper than hotels, especially in Reykjavik.

Consider camping – Rent camping gear or bring your own; campsites are inexpensive and scenic.

Cook your own meals – Groceries from Bonus, Kronan, or Netto are far cheaper than restaurants.

Pack snacks from home – Especially protein bars, instant noodles, and coffee.

Use refillable water bottles – Iceland’s tap water is some of the cleanest in the world.

Rent a campervan – Combines transport and accommodation costs in one.

Share car rental costs – Travel with others to split fuel and rental fees.

Choose self-drive tours – Gives flexibility and avoids expensive group tour fees.

Skip alcohol or buy from duty-free – Drinks in bars are very expensive.

Take advantage of free attractions – Many waterfalls, hot springs, hiking trails, and viewpoints cost nothing.

Visit free hot springs – Like Reykjadalur or Seljavallalaug instead of pricey spas, perfect for that gorgeous Iceland photography.

Use public transport when possible – Especially in Reykjavik to avoid parking fees.

Book tours in advance – Early-bird discounts are common.

Bring your own warm clothing – Avoid buying expensive gear in Iceland.

Use travel cards or passes – Reykjavik City Card includes museum entry and bus travel.

Limit souvenir shopping – Buy small, practical items like chocolate or local salts instead of costly wool sweaters.

Track expenses daily – Helps you stick to your budget and avoid surprises.

Best Things to see in Iceland

A budget-friendly road trip around Iceland often follows the Ring Road, a circular route that covers many of the country’s highlights. Starting from Reykjavík, heading clockwise offers easy access to numerous natural wonders and towns without extra detours.

Several iconic spots welcome visitors with no or minimal entrance fees. Waterfalls such as Seljalandsfoss and Skógafoss stand out for their impressive views and accessibility. The black sand beaches near Vík provide dramatic scenery without any cost.

Along the way, hiking trails in Þingvellir National Park and areas near Landmannalaugar offer rewarding experiences in untouched surroundings. Natural hot springs, like those in Reykjadalur Valley, offer relaxing stops that fit well into a budget itinerary.

Planning meals around grocery stores in larger towns helps reduce food expenses. Supermarkets such as Bonus and Krónan supply affordable options to prepare simple meals on the road.

Combining these with packed lunches or snacks allows for flexible timing and cost control during the trip. Small towns along the route often have shops suitable for restocking essentials, so carrying a cooler or portable stove enhances the ability to save on dining costs.

This route, combined with accessible attractions and thoughtful meal planning, creates an enjoyable and affordable way to explore Iceland’s unique natural beauty.

Things to know before you go to Iceland