Iceland is expensive, and most trip-cost articles quietly leave out the bits that hurt: the second driver fee, the €2-a-litre petrol, the fact that a bowl of soup costs €20. Here is what a full 1,322 km loop of Route 1 actually costs for seven days, line by line, at three different comfort levels. All figures are per person in EUR, based on two people sharing a car and a room, with flights excluded.
Same route, same week, three very different bills. Flights are not included in any of these.
Travelling solo? Add roughly 40-50% to the mid-range figure. Car and room are the two big costs and neither halves when you are alone. A group of four in one vehicle is the cheapest way to see Iceland that does not involve a tent.
Add flights on top: €150-400 return from most of Europe, €400-900 from North America, higher in July and August.
The car is usually 25-35% of the whole trip. Summer high season is brutal, winter is far kinder. Rough daily rates including basic cover:
Automatic transmission adds €10-20 a day and sells out first. A second driver is €5-10 a day and worth it on a loop this long.
Then insurance, which is where the quoted price stops being the real price. Basic CDW comes with an excess of €1,500-3,000. Gravel protection matters because long stretches of side roads throw stones, and sand and ash protection matters on the south coast, where a single storm between Vík and Kirkjubæjarklaustur can strip the paint off a car and leave you with a five-figure bill. A zero-excess package typically runs €25-45 a day. On a 7-day trip that is €175-315 you did not budget for.
Book direct with local firms like Blue Car Rental, Lava Car Rental, Northbound or Go Car Rental, or run the loop through DiscoverCars first. Prices move a lot by season and by how early you book, so compare rental prices for your exact dates rather than trusting any fixed number.
Route 1 is 1,322 km. Nobody drives only 1,322 km. Add Snæfellsnes, the Diamond Circle up to Dettifoss and Ásbyrgi, the detour to Seyðisfjörður, a few dead-end fjord roads, and a realistic week is 1,800-2,200 km.
Petrol and diesel sit around €2 per litre and barely move. So:
Get a discount key tag from N1, Olís or Orkan at your first stop. It is free and saves a few cents a litre, which adds up over 150 litres. In the east and the highlands-adjacent stretches, fill up when you are at half a tank rather than when the light comes on. Stations between Egilsstaðir and Mývatn are far apart and some are unmanned card-only pumps.
One toll exists on the loop: the Vaðlaheiði tunnel just east of Akureyri, roughly €10 for a car, paid online within 24 hours of driving through. Nobody stops you at the tunnel, so it is easy to forget and get billed a penalty later. The old mountain road over Víkurskarð is free and scenic if the weather is decent.
Per night, per person, based on two sharing:
Geography drives price more than quality does. The south coast between Hvolsvöllur and Höfn has the most visitors and the fewest beds, so it is the most expensive stretch and the first to sell out. The east fjords and the north around Mývatn and Akureyri give you noticeably more room for the money. Reykjavík is its own market and costs more than anywhere else on the loop.
For July and August, book 4-6 months ahead or you will be driving 90 minutes off-route to find a bed. Winter is looser, but the good places near Jökulsárlón still fill up for ice cave season. Our guide to where to stay on the Ring Road breaks it down by overnight stop.
Restaurants in Iceland are properly expensive. A main course is €30-45, fish soup or lamb soup €18-24, a beer €10-13, coffee €4-5. Two people eating out twice a day will spend €120-160 daily without trying.
Self-catering changes the entire trip cost. Bónus is the cheapest supermarket, then Krónan and Nettó. Realistic per person per day:
Practical notes. Bónus keeps short hours and there is no branch for long stretches of the east, so stock up in Selfoss, Höfn, Egilsstaðir or Akureyri. Alcohol is sold only in Vínbúðin state shops at high prices, so buy your allowance in the arrivals duty free at Keflavík before you leave the terminal. Tap water is excellent everywhere and buying bottled water in Iceland is money set on fire. The petrol station hot dog is around €4 and is genuinely fine.
Prices vary by season and operator, but the ranges are stable:
What is not worth it when you have your own car: a coach tour of the Golden Circle or the south coast, since you are already driving past those stops. A guided northern lights bus from Reykjavík is also hard to justify between September and March, because you are staying in the countryside anyway and can just walk outside and check the sky. Snowmobiling on Langjökull at €200-250 is a fun 60 minutes and nothing more.
Budget €40-70 for parking and facilities across the week. Seljalandsfoss, Skógafoss, Kerið, Þingvellir and Dettifoss all charge roughly €5-8 to park, and public toilets are often €2-3. Browse Ring Road tours and activities and book the ice caves and glacier walks early, since group sizes are capped.
A November or February loop can be 30-45% cheaper than the same trip in July. Cars, hotels and flights all drop. You also get ice caves, northern lights from roughly September to March, and empty car parks at Skógafoss.
The trade-off is daylight. In late December you get four to five usable hours, which makes 200 km driving days feel long and forces you to cut sights. Studded winter tyres are fitted by law roughly November to April and are included in the rental, not an extra. Storms close sections of Route 1 with no warning, so check road.is (umferdin.is) every morning and vedur.is for wind. A closed road in the east can cost you a night of pre-paid accommodation somewhere else, which is a real budget risk in winter and effectively zero in summer.
Shoulder season, late May or September, is the sweet spot: prices are down from the peak, roads are all open, and you still get 13+ hours of light.
In order of how much they actually save:
The one thing not to economise on is time. Seven days is the realistic minimum for the full loop and it means real driving days. Ten to fourteen is comfortable. If you only have five, do the south coast out and back instead of rushing the whole ring. Our 7-day Ring Road itinerary lays out the daily distances so you can see where the pressure points are before you book anything.
Excluding flights, budget €900-1,100 per person for a bare-bones trip, €1,600-1,900 for mid-range, and €2,800-3,500 for comfort. That assumes two people sharing a car and a room. Solo travellers should add 40-50%, since neither the car nor the room gets cheaper when there is one of you.
No. Route 1 is fully paved for all 1,322 km and a 2WD handles it in any season with the legally required winter tyres. You need a 4x4 only for F-roads into the Highlands, where a 2WD voids your insurance entirely. A 4x4 also gives more confidence in strong crosswinds and on gravel side roads, but it is a comfort choice, not a requirement.
January through March and late October through November are cheapest for cars, hotels and flights, often 30-45% below July prices. The cost is daylight: four to six usable hours in midwinter, plus a real chance of road closures. Late May and September give you most of the price drop with none of the darkness.
Petrol and diesel run about €2 per litre. A realistic 7-day loop with detours covers 1,800-2,200 km, so expect €250-300 in a small car, €320-370 in a compact 4x4, and €400-520 in a large SUV or campervan. Pick up a free discount key tag at N1, Olís or Orkan on day one.
It is a good first or last stop because it sits between Keflavík airport and Reykjavík, about 20 minutes from the terminal, so you can do it with luggage in the car on arrival or departure day. At €80-110 it is pricey for a soak. Sky Lagoon in Reykjavík is usually cheaper, and the local municipal pools across the country cost a few euros and are the better everyday option.