Is Iceland expensive? How to plan your budget for a 5 days road trip?

If you are planning your next trip in Iceland, you are probably wondering is it expensive to travel in Iceland? To make it clear – yes travelling in Iceland is expensive. However, not as expensive as you may think. It is not impossible to travel in Iceland on a budget, but it is harder than for some cheaper destinations.

The burning question is now, on average how much does it cost to organise a road trip in Iceland? We are providing a lot of details on the budget of our entire trip and described our key travel costs. Hopefully, this post should give you a good overview of how much will cost your future trip.

In total, we organised a 5 days road-trip in Iceland in summer 2018. Some travellers skip Iceland from their bucket list because of how expensive it is. It is not a secret that Iceland is not a cheap destination. You have probably already figured it out if you are planning your next trip in this country. And yes it is very likely, even if you are careful, that the total cost for your trip will be more expensive compared to other destinations. In total, the average cost of our road trip per day once in Iceland was about 18,650 ISK = 135 GBP / day / person.

Despite the fact it costs more than your other trips, you have to keep Iceland in your bucket list. You can’t be disappointed – Iceland is one of the most majestic and unique destination in the world. In this post, we give you some tips to limit the cost of your trip. We are also telling you everything you need to know about the major expenses to expect. We summarised all our expenses in a chart.

Mýrdalsjökull glacier - view with the drone
Mýrdalsjökull glacier – view with the drone

5 ways to save money in Iceland

True it is not cheap to travel in this stunning destination but we listed some tips to limit your budget. We travelled in summer and we planned this trip only about 2 months ahead. So we have pretty much done all the mistakes possible! You can significantly reduce the cost of your trip, if you follow some of the advice below.

Avoid the peak touristic season

Don’t go during the peak season. More and more people are travelling in Iceland, especially during summer. Hence, the choice of accommodation becomes very limited. The price of airline tickets are also much more expensive from June to August rather than in autumn. If you plan to catch the northern lights, the best time is always from September to March.

Book as early as possible

The main expenses of your road-trip are likely to be the rental car and the accommodations. You will notice that outside of the golden circle, the number of accommodations is quite low. That’s why, the quicker you can book them the better.

Decide if you need to rent a normal car or a 4*4 vehicle

Be prepared, to pay at least double the price if you would like to book a 4*4. Depending on your itinerary and how long you are staying in Iceland, you have to decide what car your need. For example, if you would like to explore the Highlands or hike the Landmannalaugar, you will need a 4*4. Some roads are bumpy and there are some places you can’t reach without a 4*4. The F roads (i.e. mountain roads) are only allowed for 4*4. But if you spend less than a week in Iceland, a normal vehicle will be sufficient.

Lava fields
Lava fields

Avoid eating out

Buy some food from the supermarket. Going to the restaurant in Iceland is pretty expensive, so we highly recommend to prepare your own food when you can, at least for the breakfast and for the diner. the only food that is cheap is the famous hot dogs and fast food. If you have enough space in your suitcases, you can also bring some snacks (e.g. nuts, energy bars, dried beef).

Travel as a group

The majority of the costs are always cheaper if you can divide them by 2 or with a group of friends. For example, the car rental cost or the accommodations. Of course, it is possible to travel solo in Iceland. In that case, the cheapest option is to take a plan guided tour.

Icelandic horses
Icelandic horses

Hopefully those few tips will help you to limit the cost of your trip. Yes travelling in Iceland is more expensive than some other countries, but it should not be a reason to miss it.

Our budget for a 5 days road trip in Iceland at a glance

We provided you below a lot of information regarding our budget. Our food budget was low as we prepare our food as often as possible. Hence we bought the majority of our food from supermarkets. On the opposite, we chose to sleep in confortable cabins rather than on cheap bunk beds.

The local currency is the Icelandic króna – ISK. The rate was about £1 = 139 ISK; €1 = 124 ISK ; $1 = 107 ISK [as of end of August 2018].

Our total cost was 233,000 ISK = 1,675 GBP for 5 days for the two of us, including our European flights from London.

The average cost per day once in Iceland was about 18,650 ISK = 135 GBP / day / person. This doesn’t include the flights.

Our travel expenses in Iceland are divided into 4 categories:

Our budget by categories – 5 days in Iceland

1. Transportation costs – 110,785 ISK (£800)

The transport expenses accounted for 47% of our full budget, so it means almost half of our total budget. But it is not surprising as it was a road trip! If you plan a trip of 5 days in Iceland, we highly recommend to rent a car. Otherwise you will be really limited if you have to rely on bus. We stopped several times per day along the road. For example to say hi to the Iceland horses, to look at some cool waterfalls along the way or drive on tiny scenic roads. However, as mentioned, renting a car in Iceland is very expensive!

road trip - Iceland

1.1 European flights – 46,565 ISK (£335). We flew with Wizz Air and Wow Air, which are 2 European low cost companies.

1.2. Car rental – 47,260 ISK (£340). We rent a classic car instead of a 4*4 vehicle. It is really important to take time before booking a car, especially for a road trip. And you will notice the prices vary a lot depending of the season and will increase if you book in the last few months before your trip. We suggest not to limit you search to the prices. For example, it is also important to consider the feedback from other customers. Don’t forget to check what kind of insurance are included (e.g. tyres, windscreen and glass etc), especially in Iceland. It is a pretty desert country and you want to be cover if you have a problem with you car in the middle of nowhere ;(.

Also to note the car you rent in Iceland are usually older/more used cars than other destinations. Ours had 150,000km on the odometer. We finally booked our car with a local rental company – Iceland Rental Car – as they were providing a good value and insurance for us. We recommend it as the car was good and the service very smooth.

1.3. Gas – 14,595 ISK (£105). We drove about 1,000 kilometres during this trip.

Road trip - iceland

2. Accommodation costs – 67,830 ISK (£490)

The accommodation expenses accounted for 29% of our full budget.

As you plan your trip, you will quickly understand the prices for hotel really depend on location but also if you are travelling on a peak season or not. There are not so many accommodations especially if you drive to remote places. And the sooner you book the better, especially if you plan to explore Iceland in summer.

Surprisingly the most expensive accommodation was not in Reykjavík, but in the middle of nowhere. And it cost us about 19,500 ISK (£141). We didn’t find any night below 14,000 ISK (£100). However, it is because we booked our hotels late and we travelled in August. If you are travelling in summer, we really recommend that you book your different nights several months in advance.

Strokkur - golden circle - Iceland

3. Food costs – 34,330 ISK (£247)

The food accounted for 15% of our full budget.

Food is quite expensive in Iceland, especially at the restaurants. As a result we comprised a little our comfort by buying the majority of our food in supermarkets and prepare our own meals. We rented several cottages with everything you need to prepare basic meals while enjoying a nice view from the terrace :). So finally it was a pretty cool experience ! You will probably stop at one of those 3 most popular and budget supermarkets along your road trip – Bónus, Krónan and Nettó.

We also treated ourself at the end of our trip with some restaurants in Reykjavík. To be honest, at that point it was so good to change from sandwiches for some hot meals ;). And of course during the road trip we also did some breaks almost every day at a coffee shop just to enjoy some pastries and a hot chocolate, tea or latte.

Note – you have to try the well-known hot dogs. You will find them as street food in Reykjavík or in any gas station.

4. The Blue Lagoon – 19,980 ISK (£140)

Our visit in the Blue Lagoon accounted for 9% of our full budget.

If you are planning a trip in Iceland – it is pretty sure that you have already heard about the Blue Lagoon. And if you are reading this post you are likely wondering whether you should add it to your trip. This hot springs with milky blue colour is one of the most popular attraction in Iceland. We spent a really enjoyable moment to relax with a mud mask and a cocktail in such amazing hot thermal pool! The timing was perfect because it was only a few hours before taking off back to London.

We read contradicting comments on the Blue Lagoon on different blogs. True it is a very expensive experience as we paid 9,990 ISK/person. And yes it is a touristy spot. So is it worth it anyway? Absolutely yes, especially if you are here only for a few days. Check out our dedicated post about the Blue Lagoon. We give you plenty of tips to spend a very relaxing in this amazing spot.

The Blue Lagoon with its famous light blue - milky colour
The Blue Lagoon with its famous light blue – milky colour

More Iceland travel inspiration

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