Martin & Tina
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21. 12. 2025 From 1 January 2026, the Icelandic government is changing the way it finances the maintenance and development of its road network. If you’re planning an adventure on this island of fire and ice, you should know about the introduction of the so-called Road Tax Fee, or mileage tax. This change replaces the previous fuel tax model and moves to a system based on actual road use.
What does this mean for you and your wallet?
The new road tax applies to all vehicles on the island, including rental vehicles. The good news for tourists is that the system is set up very transparently so that there are no unpleasant surprises on the road.
At our partner Blue Car Rental, this tax is set at ISK 1 550 per day of rental. This amount is collected in advance when booking the vehicle. Blue Car Rental collects these funds on behalf of the Icelandic authorities to ensure your trip runs smoothly without having to deal with additional invoices or complicated billing upon your return from holiday. It doesn’t matter how many kilometres you drive and if you happen to return the car a day early, the amount will be adjusted according to the actual number of days.
Why is a car still the best choice in Iceland?
Even with this new fee, renting a car remains the best and most practical way to truly experience Iceland. Public transport is very limited outside the capital, and only with your own car will you get the freedom this island demands.
Imagine being able to stop at Skógafoss waterfall at the exact moment a rainbow appears above it, or wait for the Northern Lights in a remote corner of the southern coastline, regardless of the timetable. Whether you’re heading to the south coast or the legendary Ring Road (a circular drive around the entire island), a car will allow you to get to hidden gems that organised tours often miss.
Ring Road and the most beautiful places in Iceland
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Plan your trip smartly and save money
Our itineraries to Iceland are designed specifically for travellers with a car. We’ll guide you through the most beautiful routes and advise you where to stop. And to make renting a car even more enjoyable, we have a bonus for you.
Thanks to our partnership with one of the top-rated rental companies on the island, Blue Car Rental, you can enjoy an exclusive 5% discount on your car rental. Just use our link when booking and you can invest the money you save in relaxing in one of the hot springs.
Discover the beauty of South Iceland
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Iceland in 2026 may bring a new rule, but its beauty remains the same. With your own car and our itinerary in your pocket, you’ll remember this trip for a lifetime.
