Iceland is currently ranked 5th among the most expensive countries in the world to visit behind such wallet crushers as Norway or Switzerland. It is Iceland’s remoteness, and the recent financial stabilization of the economy, that are making the Krona – the Icelandic currency, so strong.
Some say that Iceland is becoming too expensive for its own good. I say it’s good enough to be expensive.
Beauty comes at a cost these days. However, the way I see it, the less money I spend the longer I can travel. Iceland’s selling point is its uniqueness and prices will undoubtedly continue to climb. Reykjavik – the capital is now the most expensive city in Europe!
Incredibly even the hot springs are expensive!!! It’s not like it just magically flows out of the ground…. oh wait.
How to save money on a road trip across Iceland?
I spent a total of 3 weeks in Iceland on a 30 dollar / a day budget (excluding flights and car rental) and here is how I did it.
1. Camp your way around the island
Without a doubt, camping is the number one choice for most tourists heading to Iceland. Not only because of the extortionate prices of hotels and guesthouses but first and foremost, because being amongst nature is probably what brought you to Iceland in the first place.
In the summertime, every campsite is full of colorful tents. I sometimes thought I was at a tent fair or a summer music festival.
I’ve got to warn you though because Iceland has experienced such a high influx of tourists in the last few years, sometimes it seems like their facilities are overloaded with people and are completely unprepared for the number of travellers that visit.
For example, the campsite near Skogafoss, one of the most visited waterfalls in Iceland, has only a couple of toilets for a few hundred campers and a few thousand daily visitors.
Not to mention it was 2100 Krona per person per night (excluding showers). It was the most expensive campsite on the whole island that I found.
Many of those campsites don’t provide cooking facilities either. Pretty much all you can expect in return is a piece of grass where you can pitch your tent, running water, a toilet, and if you’re lucky, a bench.
I have only been to one campsite where showers were included in the price and that was in Reykjavik. To be honest, I was really surprised by it as most of Iceland gets hot water from their geothermal springs and hence doesn’t use any electricity or gas to heat it up.
They have so much hot water that in Reykjavik a lot of the roads have under-tarmac heating pipes so they don’t get icy during the winter. You don’t need to book the campsites in advance (apart from the one in Reykjavik), they operate on a first come first serve basis and there is always enough space for everyone.
Many campsites don’t even have reception but only a worker who comes in the evening or morning to collect payments from travelers. All camping grounds are very well marked around the island.
You can expect to pay anywhere between 1300 and 2100 per person per night depending on the popularity of the spot. Showers cost usually 300-500 for 5 minutes. The cheapest shower I found was coin-operated at the campsite in Höfn, where 2 minutes cost 50 krona and 6 minutes accordingly only 150 krona! Bargain!
2. Freedom camping
It’s quite a controversial topic in Iceland. Is freedom camping allowed here? It seems like even the locals can’t really answer that question without thinking about it.
So let’s make it clear once and for all. Freedom camping is not allowed unless it is a matter of emergency or it is done with prior consent from the person whose land you’re on (I received that information from an official tourism information center in Iceland).
Freedom camping is strictly prohibited in National parks and conservation areas around the country, unless, as written above, it is a matter of emergency.
Now how do you define an emergency? I’ve been told by a government tourist advisor that, if you do get caught, you can pretty much come up with anything.
For example that you are too tired to drive any further and will create danger for yourself and other drivers on the road, or you had cramps in your legs and can’t drive any further so you just had to pull up and stop exactly where you were, etc.
To be honest, I have freedom camped 14 out of 20 days during my photography road trip in Iceland, and only once have I been told to move my tent – that was in Landmannalaugar – and I admit, the spot we picked with my friends wasn’t ideal as it was very close to the official campsite and right next to the road.
All other times I tried to pitch a tent away from public sight and avoid staying on somebody’s land. If there was a sign that said camping is prohibited I obeyed and moved on somewhere else. So to answer the question. Even though freedom camping is not allowed in normal circumstances, it isn’t really enforced by anyone. If you’re a bit savvy about it, you can camp undisturbed, for free.
It’s extremely important though, that if you do a freedom camp anywhere, you obey certain rules. Don’t destroy nature, don’t litter, and don’t use the ground as a toilet, be respectful.
There is nothing more off-putting than seeing used toilet paper flying around near a beautiful natural wonder. I am sure, that with tourism in Iceland growing at an unfathomable speed, the local government will look into enforcing the rules more strictly, especially if the tourists don’t respect the land.
3. Use public swimming pools for the hot springs and showers
As mentioned previously even when staying at paid campsites, showers more often than not are not included in the price and can cost you anywhere between 300-500 krona per five minutes.
Iceland is also known for its many natural hot springs scattered around the island. Some of them like the famous blue lagoon charge extortionate prices (7.000 ISK per adult). But don’t worry, you don’t need to be a millionaire to have both, you just need to be smart.
Pretty much every little town has its own swimming pool complex with a steam room and hot tub.
They are all subsidized by the local government. The entry usually costs between 500-800 krona.
Not only you will get to shower and have the chance to feel like a new person after probably not showering for a good few days (That’s what camping is all about, right?), but you can also soak all you want in the hot tub smiling to yourself on the fact, that you just killed two birds with one stone.
4. Visit Reykjavik campsite before hitting the road
That’s probably one of the best tips I can give you before you start your road trip to Iceland.
The campsite in Reykjavik is a gold mine for anyone who just got to this country.
First of all, when you fly in you won’t be able to bring gas canisters with you (which is what you’ll need for cooking if you decide on camping). Before you decide to buy one just go to the campsite.
You can grab the canisters which people have left behind when departing Iceland. Some of them are almost full! There are designated spots for it at the campsite, just ask where it is at the reception.
I found 6 canisters which lasted me for a whole week and I still brought some of them back with me and left them at the campsite for others. Not only will you save loads of money but you will also help the environment a bit by not buying new ones.
There are also free food shelves in the campsite’s kitchen which you can roam through and pick up some things left behind, like half-full jam jars, peanut butter jars, cooking oils, seasonings, pasta, rice, etc. Stocking up at the campsite for food and gas easily saved me a few thousand Krona.
5. Stock up before leaving Reykjavik
If you are in Iceland for a week or two and decide on camping you will need some food supplies. The farther away you travel from Reykjavik the less choice you’ll have for food shopping.
There is usually one supermarket in each town, but the prices are significantly higher than in Reykjavik, where also, the choices are much more extensive.
The biggest discount supermarket is Bonus and that’s where I did most of my shopping before leaving the capital and hitting the road.
They have a wide array of products at affordable prices. The food is still a bit more expensive than in mainland Europe, especially products like cheese and meat, but I think you can survive a couple of weeks without either of them.
5. Avoid tourist traps
The most famous tourist trap that you can fall into is the Blue Lagoon near the Keflavik airport. I haven’t been there myself and in all honesty, I had no desire from the start to go there.
You may wonder why? Here is the thing. Iceland is one big geothermal area. When you’ll travel around the island you will notice loads of places where steam is rising from the ground. The rotten egg sulfur smell is quite common wherever you go.
There are countless hot springs scattered around the island which cost not only a fraction of the price of the blue lagoon but sometimes are completely free.
Many of them are also placed in more beautiful surroundings too. Two of my favorite ones were the hot springs right near the campsite in Landmannalaugar which don’t cost anything and Grettislaug in the north part of the island with a killer view over the Fjords. The latter cost 1000 Krona.
If however, you do insist on visiting a fancy geothermal spa, instead of going to The Blue Lagoon, maybe you should consider the hot springs in Myvatn instead. Not only do they resemble the blue lagoon but they are half the price, or a third of the price with a student ID, and don’t require prior bookings.
7. Cook for yourself
That’s really a no-brainer when it comes down to money, but in Iceland cooking for yourself will save you a lot!
The restaurants here are not cheap. You can easily expect to pay between 2000-3000 for a meal. That was my budget for a whole day!
The downside of it is that you will have to bring your cooking equipment with you, but then again in this day and age, camping gear is super compact.
Combined they weigh together only a few hundred grams and are so small after they’re folded that you won’t even notice the extra weight in your luggage.
8. Rent a gas-friendly car
When it comes down to transportation in Iceland, as per usual, it isn’t cheap. Around 7.50 USD a gallon for gas. In fact, it will probably be your biggest expense whilst traveling around.
Car rental companies are notorious for coming up with extortionate prices for the smallest cars on the market.
After all, the competition is small and the demand very high. Try to compare the prices first. For that, I always use Discover Cars.
If you want to rent a 4WD to get to places like Landmannalaugar you can count on spending 300 Euro a day for a rental vehicle. Outrageous I know.
You will also need to purchase travel insurance required for a car that you will be taking on so-called F-roads.
F-roads are unsealed roads usually in very poor condition, very bumpy with lots of potholes and fords to cross. Potholes are similar in size to the Mariana Trench haha. Don’t even think about taking your 2WD on those roads!
9. Bike, hitchhike, or rent a campervan
Another option for somebody who doesn’t have, or doesn’t want to bring all their camping equipment with them is renting out a custom-built camper van and sleeping in it.
Road-tripping Iceland in a motorhome is an extremely popular way to see the country.
Go Campers and Kuku campers seemed to be the most popular amongst other travellers and I saw them all around the island.
You can easily park it anywhere and you will have the comfort of having a roof above your head should the weather be bad and trust me, that’s very common in Iceland (even in the summer months).
Save yourself some time when looking at all the different companies that offer campervan rentals in Iceland and let the Motorhome Republic do it for you. Plus they offer the lowest prices!
If you are more adventurous or on a very tight budget, you may also consider bringing over your bike and traveling the ring road using the power of your own legs.
Do bear in mind though, that Icelandic roads are very mountainous and the weather here is rather unpredictable. Biking against gale-force winds doesn’t seem like an appealing idea to me, but I drove past loads of bikers on the island who were brave enough to face them. Hitchhiking seems to be very popular around here as well.
After speaking with a few people who have done it, it seems like picking up a ride isn’t a problem. I think as long as you make a cool sign, look friendly, and don’t have too much luggage with you, you should be able to catch a ride quickly.
10. Bring your own car on a ferry
Before traveling to Iceland I never even considered another option of getting here other than on an airplane.
Probably because my visit to Iceland was just a long stopover on my way to Canada to do research for my Canadian Travel Guide. Once here, I noticed quite a few cars on the road with license plates from all over Europe.
If you are traveling to Iceland and own a vehicle, you might want to consider taking it with you on a ferry.
The price for 2 adults + car from Denmark with Smyril Line is around 1000 Euros round trip.
That’s way cheaper than flying here and renting a car for 2 weeks. With that said ferry options are very limited. They only depart from a few European destinations and are also not very frequent, but it is always an option.
11. Don’t buy bottled water
I know a lot of you may be scared when drinking tap water. Hell, I am sometimes very cautious when it comes down to it. I once contracted Salmonella in Bolivia just by eating fresh fruit washed in tap water. Iceland is not Bolivia though.
The quality of the water here is incredible and buying bottled water borders with sinning.
You can just bring a water pouch with you or purchase a 10-liter water bottle at the start of your trip and fill it up as you go at the campsites, gas stations, springs, etc.
I have done this all along the trip and I am still alive and well and so is my stomach. If however you still don’t feel 100 % sure about it you can always boil it or filter it first.
I have recently purchased the platypus water filtration system which I have used on my trek in Mount Assiniboine Provincial Park in Canada and I couldn’t be happier with it.
If you think it’s something you may reuse over and over again in the future it is worth investing in one and bringing it with you on a road trip in Iceland.
12. Visit Iceland on a stopover
A Stopover or in other words a break in your journey is a very popular way to see Iceland. I did it before moving to Canada, though my 3-week long stopover was probably more lengthy than an average 5-7 day offered by, for example, Icelandic Air.
When planning my move to Canada I first booked a one-way ticket from Berlin to Reykjavik and then a second one-way ticket from Reykjavik to Edmonton in Canada. The total cost of my ticket was less than $400 USD. Not bad huh?
You may be surprised but often booking one-way tickets with different airlines may be cheaper than booking a return trip.
When booking flights I always check either Skyscanner or kiwi.com with the latter being my recent favorite for the number of options it gives me when looking for a flight.
From checking the nearest airports for the best deals to combining regular flight providers with low-cost airlines, give it a try and you won’t be disappointed.
Iceland travel resources mentioned in the post
Below are some links that will become useful in planning your budget road trip around Iceland.
- Motorhome Republic – find your perfect road trip campervan with this easy-to-use booking search engine.
- Discover Cars – if you are after renting a smaller car, this is the best website for comparing prices.
- Booking.com – my go-to website for booking accommodation.
- Get Your Guide – Are you planning any activities like glacier hiking? Stay flexible and book through get your guide to getting the best deals!
- Road.is – A website where you can check the current road conditions. Very useful for traveling off-season.