Car Rental Costs in Iceland: What the 2026 Road Tax Means for Visitors

Changes to car rental costs in Iceland could arise as a result of Iceland’s new Road Tax 2026. The updated system introduces a mileage-based model for funding the country’s road infrastructure, designed to ensure a fairer distribution of costs among all drivers. To ensure travelers fully understand the recent changes, leading car rental company Hertz Iceland has released a clear and user-friendly guide outlining key information to consider before renting a car in Iceland.

The updated system replaces the former fuel-based road tax with a distance-based charge, meaning drivers now pay according to how many kilometers they drive. This approach reflects shifts in the automotive landscape, particularly the rise in electric and hybrid vehicles on Icelandic roads, and is designed to create a fairer contribution model across all types of vehicles.

Iceland’s new Road Tax 2026 forms part of the government’s “Vegir okkar allra” (Our Roads to the Future) program, which focuses on the long-term upkeep and development of national transport infrastructure. For visitors, this initiative helps maintain and improve the roadways that provide access to some of Iceland’s most renowned natural attractions.

To make the transition seamless for customers and help manage car rental costs in Iceland, Hertz Iceland takes care of all required odometer submissions and road tax payments directly with the Icelandic Tax Authorities. Fees are calculated transparently based on mileage, with a clearly specified service charge included in the rental agreement.

By overseeing these administrative tasks, Hertz Iceland allows travelers to focus on enjoying their journey and discovering Iceland’s remarkable landscapes without unnecessary complications.

To learn more about how Hertz Iceland is handling Iceland’s new Road Tax 2026, visit:
https://www.hertz.is/car-rental-tips/guide-to-icelands-new-road-tax-2026/

About Hertz Iceland
Hertz Iceland is a leading car rental company in Iceland, locally operated for over 50 years and backed by deep-rooted expertise in the country’s unique driving conditions. Offering a wide range of vehicles for travellers exploring the island, its diverse and modern fleet includes everything from economical city cars to rugged 4×4 Land Rovers. With decades of local knowledge, Hertz Iceland provides seamless access to high-quality vehicles perfectly suited to Iceland’s terrain and ever-changing weather conditions.

To rent a car in Iceland or to learn more about Hertz Iceland, visit www.hertz.is.

Contact Information

Tan Lau

Head of Digital Marketing

Hertz Iceland

tan@hertz.is