12 Tips For Traveling Iceland On A Budget
Iceland - Rugged, beautiful, adventurous, expensive? Iceland definitely has a reputation for being an expensive place to visit however it doesn’t have to be as expensive as you might think!
If you’re willing to put in some research and maybe sacrifice a little luxury you can make even a tighter budget work!
Here are my 12 tips for saving money and traveling Iceland on a budget!
1) Rent A Camper van
Renting a camper van has to be the best and cheapest way to explore Iceland. It gives you the freedom to come and go as you please, cook and have lunch on the road as well as tailor your trip to your budget.
If you are on a tighter budget look out for more basic camper, older camper van options.
A lot of companies have a newer fleet that makes up their main brand and then often use their older vehicles to rent out under a different brand name. So more often than not you’ll still be renting from a large trusted rental company that simply rents their older models under different branding and at much lower prices.
The van in the image below was a 2016 model, about 8 years old at the time. It was a little more beaten up and had some pretty basic features but saved us a lot of money!
Feature wise it simply had a bed, a cool box for food, storage space and a camp stove for cooking.
However in a place like Iceland you’re rarely in the van unless you’re sleeping or driving! If visiting in the summer months you’ll spend all your time outside so in my opinion the need for a larger van just isn’t there.
Of course you can go larger if you’re traveling with a family or in the winter months!
The best way to check multiple places at once is via a 3rd party price comparison like Northbound.is - more on that below!
2) Compare And Price Match - 3rd Party is Sometimes Cheaper!
Now here’s the secret to saving money on a camper!
Most camper van rental companies offer free cancellation up to 48 hours in advance with no deposit and you should take advantage of this.
When we originally booked our camper van for 10 days it was €1000, we booked this well in advance and it gave us piece of mind that we had something locked down.
However as our trip approached we kept checking prices for the very same van as well as other options. If our van dropped in price we emailed the company and price matched them against themselves reducing our rental costs.
Then finally just before our trip I found the same van on a 3rd party comparison website for just €400 a saving of €600 or almost $1000 CAD!
I immediately cancelled our original booking and booked the same van at this massively reduced price with no penalties. Why wouldn’t you!
3) Stay in Campgrounds
Unfortunately gone are the days when you could get away with freedom camping in Iceland so to get a good nights sleep you do have to stay in designated campgrounds. The good news is these rarely need reserving allowing you to remain flexible as you travel.
A lot of these campgrounds are pretty basic and in all honesty more expensive than they should be.
Some offer very basic facilities with simple toilet blocks and somewhere to park your van and some even charge you extra for a hot shower! On average you’ll pay around 4000 to 5000 kr per night for 2 people.
Not cheap but much cheaper than a hotel and for what some of these campgrounds lack in facilities they more than make up for in location and scenery. In fact the way to stay closest to the action is to stay in a campground making any early morning photography adventures much easier!
Campground Recommendations
Skógar Campsite is very basic and in all honesty the toilet block is a bit of a mess! However the location is hard to beat. Here you can pull up your van a stones throw away from one of Iceland’s most famous waterfalls.
Þakgil (Thakgil) Campground is located further inland away from the ring road but offers some of the most scenic camping out there!
Vik Camping has to be one of the best on the ring road. Located in the town of Vik on the south coast and actually has some pretty nice facilities! A decent toilet and shower block, wifi and even a kitchen shelter!
The huts at Þakgil (Thakgil) Campground
4) Car or Van Rental Insurance
Rental insurance can easily almost double the cost of a rental, especially when added on the day at the rental pick up location.
In Iceland though you’ll most likely want it for piece of mind and there are a lot of different types of insurance to add on, like volcanic ash, windscreen, gravel and wind cover.
Ways To Save some Cash:
To save money first check to see if your credit card covers rental insurance, nowadays a lot of different providers do and this can save you a lot of cash! Be sure to check the fine print though to make sure you’re fully covered, Iceland weather is wild and I wouldn’t recommend traveling without rental insurance.
Alternatively consider insuring your rental via a 3rd party insurer before you arrive in Iceland. These can often be much cheaper whilst still covering every eventuality.
The best option for a 3rd party insurer is Rentalcover.com
Rent a smaller, older vehicle as this will most likely bring the overall insurance cost down too.
If you plan on going on F-Roads and fording deep rivers you’ll need to make sure that’s covered too!
Do however also keep in mind that the insurance on offer at a rental location can often include extras like tables, camp chairs, inverter, gas and 4G wifi dongles! Having these included can save you money in other ways, so be sure to do the math beforehand and work out which is best for you, more on that below!
5) Rent a Wifi Dongle!
When we travelled Iceland a 4G wifi dongle was included in our insurance package for our camper van but these could also be added on to a rental seperately for just 5 Euros a day. From our research at the time this was actually the cheapest way for us both to be able to get data on our phones.
The great thing about using a 4G wifi dongle is that multiple phones can run off the same network. So rather than both of us paying for an e-sim we could simply run off the one dongle. It simply charged as we drove and I unplugged it and popped it in my pocket whilst we were out and about.
6) Don’t Rent a 4WD Car!
Now this tip might be a little controversial because most people think 4WD is a necessity when visiting Iceland. A 4WD vehicle obviously has it’s advantages but for the majority of travellers visiting Iceland, especially in the summer months, don’t need to pay the premium.
The main spots in Iceland are spread around the country close to the coast and close to the main ring road. To drive this road you really don’t need a 4WD as it’s well kept and well paved. So you’ll still be able to access most of the famous locations with out one.
The Icelandic ring road!
4WD is useful if you plan on visiting the Icelandic Highlands and are comfortable driving more extreme off road trails however there are also lots of inland roads that lead in to lesser visited areas that aren’t F Roads (inland backcountry roads that are often badly maintained) and you’ll still be covered by insurance to drive on.
For example Thakgil is a beautiful spot just off of the main ring road accessed via a gravel road that has some fantastic hiking. Although the road is gravel it isn’t an ‘F Road’ and therefore there’s nothing stopping you heading down in a 2WD!
The drive in to Thakgil - not an F Road! Accessible via 2WD.
We spent 95% of our time in Iceland in a 2WD with no issue. The one time we ventured further in to the highlands to visit an area called Thorsmork we opted to travel on a 4WD bus transfer.
To drive in to places like Thorsmork you don’t just need a 4WD but a specialised off road vehicle with a snorkel, appropriate tyres and some off road driving experience. These are expensive to rent and in all honesty I’d rather leave the deep river crossings to the experts rather than try and tackle them myself!
An example of a river crossing to Thorsmork, more than the average 4WD is required!
If it’s your first trip and you’re on a budget there’s so much to see without the need for a 4WD I’d recommend saving the money!
7) Plan Your Route And Budget For Gas!
One of your main expenses in Iceland is going to be fuel. The best way to reduce this cost is again to opt for a smaller 2WD vehicle as these will be more fuel efficient.
I’d also recommend plotting your route and using a gas calculator to estimate the overall cost. That way you can work out in advance if that 2 hour detour to another waterfall is actually worth it!
Calculate Your Gas
8) Stock Up In Reykjavík
Food has a reputation for being expensive in Iceland but as far as groceries go I think it’s a matter of perspective.
If you’re from the EU or the UK the supermarket prices might give you a bit of a shock, however if you’re visiting from North America you’ll probably be pleasantly surprised.
Coming from Canada we found a lot of supermarket goods to be a similar price or cheaper than what we’d pay back home, however eating out was definitely more expensive. Dried noodles, pasta, sauces, bread, tinned goods and most importantly cheese were all very reasonably priced!
The shelves of a Bónus supermarket!
Being able to cook for yourself will also save you a lot of money on a trip to Iceland which is another plus when renting a camper van where you can do just that!
The most affordable supermarket tends to be ‘Bónus’, a supermarket home to a bright pink pig mascot. You’ll see the bright yellow and pink flags and signage all around Reykjavík so be sure to stock up before you head out on the road.
Look out for the pig!
Other good locations to stock up are Krónan Vík in the town of Vík on the south coast, smaller ‘Nettó’ supermarkets in towns like Höfn or in Akureyri in the north which is also home to several Bónus supermarkets.
Outside of the Bónus supermarkets prices definitely increase a little but we never found them too outrageous especially when compared to Canadian grocery prices!
However that might not speak much to how cheap groceries are in Iceland but tell more of a story of how expensive they are in Canada!
9) Free Food!
Most camper van and car rental pick up locations have some kind of a ‘Free Food Zone’. This is a spot where other campers drop off their unused food items.
It can be a great place to pick up spare camping gas and other staples like cooking oil, dried pasta, salt and pepper as well a chancing upon the odd treat!
These sections are always worth checking before you head to the supermarket and can save you a pretty penny! If you don’t end up using them you can simply drop them off at the end of your trip for the next travellers!
Free food up for grabs at our camper van rental!
10) Eat Hot Dogs!
Now you’ve probably already heard of the Icelandic hot dog as they’ve become pretty infamous as a great roadside snack and to be honest everything you’ve heard is true!
From famous hotdog stands in Reykjavík to a gas station on the west coast you can get these hot dogs everywhere in Iceland and the best news is they’re cheap and they’re tasty!
Most places sell a locally sauced hot dog in a bun with some sauces and crispy onions from 500 to 700 kr that’s about $5 to $7 CAD. These are probably the best value things you can eat in Iceland and supply is plentiful! The more hot dogs you eat the more you save! A perfect mid road trip snack.
11) Don’t Visit the Blue Lagoon
This again could be a controversial opinion! After all the Blue Lagoon is world famous and at the top of most visitors bucket lists.
However because of it’s popularity it is also in high demand and therefore expensive!
A dip at the blue lagoon will set you back anywere between $106 and $166 USD, not a budget friendly experience!
The good new is though that Iceland is built on geothermal energy and you’ll find hot springs all over the country. Some are natural, set atop waterfalls and free, some request a small fee and others are private, man made, scenic, further away from Reykjavík and therefore much cheaper!
So on your trip skip the Blue Lagoon and get out there and explore!
Hvammsvik Hot Springs an hour from Reykjavík and substantially cheaper.
A lesser known hot spring that was just $25 CAD for a dip!
12) Use Your Legs!
It’s easy to get caught up in the endless tours, boat rides and activities spread across Iceland all of which cost money and it can add up fast!
Iceland however is about it’s nature and it’s scenery, there truly is nowhere else like it in the world. The best thing you can do to see the country and all it has to offer is just get out on foot and explore!
If you’re willing and able to lace up those hiking boots and put in some kilometres you’ll discover so much more and the best thing is, walking is free!
