How to Road Trip Iceland on a Budget

Iceland; the land of Fire and Ice, more sheep than people by a long shot, the most extreme bi-polar weather you could imagine, and daily costs that will leave you prone to a heart attack. It’s true when someone mentions that Iceland is absurdly expensive, in all fairness they do have to import a large majority of their items as it’s an island country in the middle of nowhere, so who could blame them? Nordic countries in general are some of the most expensive in the world, certainly the most expensive that i’ve ever witnessed personally, as I type this from Norway, can confirm, it’s rough here too.

Once you get past the hit your wallet could potentially take, you will also quickly realize that Iceland is a one of a kind country with so much to offer, the scenery is so dramatic you’ll swear that the place isn’t real. The real problem in Iceland for me was that I just wanted to stop there car every 10 minutes because there was a sensational photography opportunity around every corner.

I traveled the Ring Road (their primary highway that circles the whole country, also known as Highway 1) as far and as widely as I could in my week visiting Iceland. I like to think my days were jam packed filled with sightseeing and amazing places, so while I traveled on an extreme budget, I did so in a smart fashion and refused to give up opportunities for the sake of being cheap, I just had to find an alternative way is all. Right now as living proof I can tell you confidently, you CAN travel Iceland very well on a budget!

Listed below were my primary tactics for saving money while taking a road trip around Iceland to experience more, save yourself from burning your wallet easily like so many others, and basically ball on a budget Icelandic style!

Because what’s more rad than a volcano? A volcano with waterfalls that’s what….and because Iceland that’s why!

Bring a water bottle/hydro pack

Water here is of the finest variant, straight out of a glacier or crystal clear stream, yet what is our common pattern if you’ve caught on yet? It’s super expensive, truly shocking I know I know. The tap water everywhere is perfectly fine to drink and is some of the cleanest in the world, doesn’t matter if you fill it up in a bathroom sink or a water fountain it’s all good here.

Load up a hydro pack and you’ll be all set for the day and won’t spend a dime, every little bit helps in places like Iceland. On a random note of the Icelandic water it has a distinct “sulfur” smell to it because the whole country is basically geothermal, and sometimes it’s more challenging to find cold water than it is hot water. To anyone who has traveled in developing countries and has ever missed having hot water, welcome to the polar opposite, where you will sometimes be on the search for cold water and have too much hot water. Fun little trade off isn’t it?

Rent a secondhand car

This is no shameless plug, I really did have a  great experience with the rental car company based out of Reykjavik called SADcars. These guys rent all sorts of cars from tiny Ford Focus’s to 4×4 monsters, they have a surprisingly wide selection. I rented a Ford Focus for HALF the price of what the competitors all over Reykjavik were charging, which was basically an arm, a leg, and my first born in exchange for a decent vehicle.

Fair warning: you will stop the car every 10 minutes for the views, even the horses are this majestic

With such a small car the fuel efficiency made a major difference with how often I had to fill up. This matters greatly in Iceland, as the price of gas was the number one wallet burner that I ran into, at about a solid $8 per gallon, it’s ludicrous.

avoid the hostels and hotels, bring a tent

At the very least if you choose the hostel life, bring your own sleeping bag, as most hostels will charge about $10 or more for sheets (yikes).

There are camping spots all along the Ring Road, honestly if there is a major nature attraction off of the Ring Road there’s a good chance there is a campsite nearby with full facilities. These campsites are generally around $10 tops, which is pocket change compared to the $50-$100 per night at any of the hostels and hotels.

The camping itself is amazing all over this wondrous country, as one night you could be set up at the base of a volcano and the next falling asleep to the sound of a waterfall outside of your tent. To my nature lovers out there it’s the way to go, I couldn’t possibly recommend it enough and the sites themselves are all grade A. Some of the famous spots in the South would be Thakgil (widely known as the best camping spot in Iceland) and the camping directly next to Skogafoss not too far out of Reykjavik.

Camping everywhere saved me a massive chunk of change, you get to get more into the real wild nitty gritty of Iceland, which is exactly what I was going for personally.

IMPORTANT NOTE: If you are traveling in the summer, bring an eye mask for the constant sunlight. Iceland is the land of the midnight sun during the summer months, so it is only dark for 2-3 hours in these months and even then it doesn’t fully get dark. While you’re out camping you will have trouble sleeping as your internal clock will have no idea what is going on, unless you block out the sun with a mask or some other creative way.

Searching for a camping spot at Stokkness Beach

Don’t touch the booze

This goes against who I am as a person, just kidding, but maybe not. I like a good night life, what can I say, especially discovering the night life in foreign countries is always entirely too much fun for me. In Iceland, the price of alcohol (and coffee for the matter) is insanely high due to the taxes. Take my word for it, save your money for the many wonders of the country and don’t touch the sauce, you will thank me.

Examples of beverage costs in Iceland:

  • Beer – $8-$12 for a pint.
  • Shot – $8 – $14
  • Bottle of Wine – $20-$30 for something low end
  • Coffee – $5-$8 (this is what really got me)

The list goes on but I think you get the gist of it!

Gas station food and budget groceries

Healthy? Not usually, but it’s an efficient way to go about using your food budget here. You will find that the cheapest “meals” in Iceland come in the form of sandwiches and hot dogs (hot dogs are a HUGE thing in Iceland) from the gas stations. Who knew that the local food of choice would be hot dogs? It was a bit of a surprise to me but that’s what’s cheap and they’re not too bad at all.

As for grocery stores there’s one that reigns above all, it’s called Bonus. These are iconic in Iceland, with the big pink pig logo you will find these all over Reykjavik and scarcely in other places, so  I would recommend loading up at one of these stores before leaving the city on your road trip!

bring in your own food

Iceland allows you to bring in your own food on the plane so long as it’s under 3KG (7lbs), even then they really didn’t even check my groceries on the way end. To be fair, they really didn’t check anything for me on the way in, I kept asking myself; “so when do I go through customs??” You can load up on instant and ready -to-eat foods to bring with you to help cut those grocery costs way down. I brought in as much as I could carry and saved a LOT of money by doing so, it made up for one or two of my meals per day so I would only have to purchase one or two others, this made a big difference.

Catching the midnight sunset, fun fact it’s only dark for 2-3 hours during summer months!


I realize this is an article about Iceland road tripping, but I feel the need to include a section about the hitchhiking cultures as I managed to fit a little bit of this in along the Ring Road.

Hitchhiking is pretty big in Iceland, you can see lots of people doing it outside of most major towns or attractions, especially in the summer months. It’s way too easy of a place to do it (if you’re okay with a bit of waiting time because well, not many people here). For hitchhiking the ring road you just have two options typically, do I go left or right on Highway 1, that’s as simple as it gets in the world of hitchhiking. The locals are friendly as are most of the travelers passing through the country in my experience, so I would absolutely recommend it as a safe and efficient way to see the country if you aren’t willing to shell out the cash for a rental car!

Hitchhiked my way up here, as it was up a 4×4 road only. This goes to show you can even hitchhike for hikes!

Iceland absolutely doesn’t have to be break your bank to travel. These easy to follow solutions will help you to turn Iceland into a budget-friendly destination that should be checked off of anyone’s bucket list! Overall, while Iceland is never going to be “dirt cheap” like SE Asia or developing countries (obviously), it does NOT need to be an impossible budget destination for the wealthy only. You can come here and travel comfortably without spending your life savings even on a backpacker’s budget, and you can travel it well, the most important part of all.

** Questions or feedback regarding my travels around Iceland?? Hit me with a comment below or shoot me a direct message/email and I’m always happy to help out! I will be following this up soon with another article detailing my favorite spots to explore in Iceland, so stay tuned and remember to Like/Share/Comment.

More from Iceland coming soon…



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