Essential Rental Terms and Conditions 

Cancellation Policy – Prepaid Bookings

In case of a cancellation, the rental needs to be cancelled more than 3 days prior to rental pick up for a full refund. If a rental is cancelled with less than 3 days notice or in case of no show the full rental price will be charged.

• 3 days or earlier – Full refund
• Less than 3 days  – Non refundable

If you need to cancel your prepaid reservation please do so by sending an email to dollar@dollar.is stating your name and reservation number.

Cancellation Policy – Pay on Arrival Bookings

Pay on arrival bookings (pay later) can be cancelled up to the time your rental is due to begin. You can cancel pay on arrival bookings on our website by clicking the View/Cancel booking button in the top right hand corner of the website.

Want To Extend Your Booking?

• Extensions depend on availability at the time of request. Additional charges apply based on the extension period and rental rate for an available vehicle.
• Please note, if the rental was originally paid through a third party but is not extended through them, standard rates from Dollar Rent a Car Iceland apply.
• Extensions are confirmed only after the renter has electronically signed a new rental contract and paid for the extension.

Flexible Cancellation and Refund Policy

To cancel your car rental booking promptly, please contact us and provide your reservation number, which can be found in your confirmation email.

Refunds may take 3-10 business days to reflect on your credit card statement. If you do not see the

Rental Requirements:

A credit card under the renter’s name is obligatory. The credit card must remain valid for at least 6 months beyond the vehicle’s scheduled return date. The physical credit card must be presented during vehicle pickup. A valid driver’s license is necessary for all rentals.

Credit Card Policy:

Credit Card Requirements at Pickup – Dollar Iceland – To collect your rental vehicle, you must present a valid credit card in the main driver’s name. Please note the following important conditions:

• The cardholder must be the renter.
• The physical credit card must be presented at the rental desk.
• Debit cards and prepaid credit cards are accepted if sufficient funds are available and the card has a 16-digit number starting with 4 or 5.
• The card used for online prepayment must be presented at pickup.
• Virtual cards, Apple Pay, Google Pay, and similar payment methods are not accepted.
• Cash payments are not accepted under any circumstances.

New Road Tax 2026

From 1 January 2026, Dollar Car Rental Iceland applies the mandatory Road Tax Fee in accordance with Iceland’s national kilometer-based road usage system (kílómetragjald). This government-mandated tax is calculated per kilometer driven and vehicle weight, and applies to all vehicles on Icelandic roads, including rental cars. It is a legal requirement set by Icelandic authorities to fund road maintenance and infrastructure, not a fee introduced by Dollar.

The charge applied to your rental agreement consists of two clear parts:

1. Government Road Tax: The mandatory fee set by the Icelandic Parliament.
2. Thrifty Service Fee: Covers the administrative cost of processing, reporting, and remitting these taxes to the government.

	Rate (Per KM)
Government Road Tax	6.95 ISK (Approx . 0.056 USD / 0.047 EUR)
Thrifty Service Fee	1.40 ISK (+ VAT) (Approx . 0.011 USD / 0.0095 EUR)

The Road Tax appears as its own line item at these points:

• On your rental agreement at the check-in desk
• On your final invoice after drop-off

This clear separation helps show exactly what portion of your total cost is the government-mandated tax versus your actual rental service.

Driver License Policy

• All drivers must present their valid driver’s licenses at pickup. The renter has the option to designate another driver if they prefer not to drive.
• A valid driver’s license with Latin letters is sufficient. If the license does not include Latin letters, an International Driver’s License must be provided. Please note, an International Driver’s License must always be presented alongside the national driver’s license at pickup.
• You can rent a car with a newly issued driver’s license; however, please review the minimum age requirement below.
• The minimum age for drivers is 20 years old. For more details about car classes, please visit our cars page.

Dollar Rent a Car Iceland Late Arrival Policy

Reservations will be held for two (2) hours beyond the reserved pick-up time, unless you contact us to adjust your arrival time. After two hours, the reserved vehicle may be made available to other customers. If you arrive later than two hours after the reserved pick-up time, we will attempt to provide a vehicle, but availability cannot be guaranteed.

In case of a flight delay extending beyond the opening hours of the location, the facility will remain open provided the reservation includes the correct flight number and the airline has notified us of the delay and revised arrival time. An out-of-hours fee will apply after regular opening hours.

Administration Fees and Other Charges

Familiarize yourself with our administration fees and additional charges, which can be avoided by adhering to the terms and conditions of the rental agreement. Please read them thoroughly. It is crucial to ensure parking fees are paid, adhere to speed limits, and refill the fuel tank before returning the car, as this can lead to cost savings.

Fines/Charges/Fees	Amount [ISK]
Fine for smoking in car	100.000
Extra cleaning charge	24.900
Fuel cost per liter for missing fuel	According to daily rate at Olis
Fuel filling administration fee	6.000
Administration fee for parking tickets	4.000 (per ticket)
Administration fee for traffic violations	4.000 (per request)
Administration fee for postal services of lost and found	6.000

Emergency assistance

If a renter is responsible for immobilizing a vehicle and requires assistance from Dollar, an emergency assistance fee will be applied as follows:

Fines/Charges/Fees	Amount [ISK]
Emergency assistance fee	500 ISK/KM
Emergency assistance starter fee	64.900 ISK

If the car rental agency or renter needs to engage a third party to recover or retrieve the vehicle, the emergency assistance fee will be based on the rates specified by the rescuing party, which the renter should review. Additionally, Dollar Rent a Car will charge a starting emergency fee of 64.900 ISK.

Obligations of the Renter

1) The Renter accepts the provisions of this rental agreement and has received a copy of it.

2) The driver shall be at least 20 years of age and shall have held a driver’s license for at least one year before renting a vehicle. The Renter shall abide by Icelandic law and regulations when driving. The vehicle is under the liability of the Renter during the rental period, which, under this rental agreement, can never be less than until the vehicle has been registered as returned in the Lessor’s system. Registration of return can only take place during opening hours.

3) The Renter shall return the vehicle as stated below:
a. With all attachments, including tires, tools, documents, maps and other items that were in or on the vehicle upon rental, in the same condition as upon reception, except for normal wear and tear from use. If something is missing the Renter agrees that the cost price of individual items that are absent when the vehicle is returned will be charged to his credit card which the Renter presented at the beginning of the rent as method of payment. The same applies if extra parts that came with the vehicle are missing upon the vehicle’s return or if returned in an unsatisfactory condition, i.e. these items will be charged to the credit card presented at the beginning of the rent. b. At the predetermined time as stated on the front page of the rental agreement or sooner if the Lessor demands it, e.g. violation of this terms and conditions. c. At the Lessor’s car rental location where the vehicle was rented, unless otherwise agreed. If at the end of the rental period the vehicle is not left at the Lessor’s rental location, the Lessor is authorized to charge the renter for pick-up of the vehicle according to the Lessor price list. d. With a full tank of fuel. If the vehicle is not returned with a full fuel tank the Lessor is authorized to charge the Renter for the difference in fuel until the tank is full at the price list of the Lessor.

4) The Renter shall pay for the fuel and other needed for driving the vehicle for the period of time the vehicle is at his responsibility, which in the interpretation of this agreement, is never a shorter period than the period the Lessor has registered the vehicle in its system as returned, which can only be processed during opening hours.

5) If the Renter does not return the vehicle at the correct time according to this rental agreement, or negotiates extended rental with the Lessors office, the Lessor or the police are authorized to take possession of the vehicle without further notice at the Renters expense. Extended rental is subject to the consent of the Lessor. If the Renter returns the vehicle 1 hour or later after the expiry of the rental period, the Lessor is authorized to collect as much as a one-day rent according to this rental agreement. For every day that begins thereafter, the Lessor may collect all charges as per price list of the Lessor.

6) The vehicle shall be carefully driven. Only persons who are registered with the Lessor as the drivers and who meet the provisions of Item 2 above, are authorized to drive the rented vehicle. If the vehicle is driven by a person who is not registered in this rental agreement, all insurances, waivers and protections become null and void, in which instance the Renter is fully liable for the vehicle, for damage it may sustain, damage it may cause others, items or vehicles, and obligates to pay such damage in full.

7) The Renter has objective liability in respect of the vehicle towards the Lessor, for example, because of damage sustained by the Lessor or if the vehicle is stolen.

8) The Renter has objective liability in respect of the Lessor for damage derived from the use of the vehicle, including damage to passengers or other persons.

9) The Renter is liable for damage derived from the use of the vehicle, including damage to the vehicle and/or passengers that may be traced to the following factors:
a. Off-road driving. b. Driving in rivers or any kind of watercourses. c. Intentional actions or major negligence. d. Drivers usage of intoxicants. e. Usage of the vehicle that is in breach of Icelandic law and/or the provisions of this rental agreement. f. driving in ash- and sand blowing conditions.

10) The Renter is unauthorized to use the vehicle for:
a. Off-road driving, for example on closed roads, in paths and tracks, on beaches, in areas only accessible during low tide, or in other trackless areas. b. Driving on roads that are marked with an F on official maps, as well as driving the Kjölur (nr. 35) or Kaldidalur (nr. 550) roads, and roads to Landmannalaugar (nr. 208), except on vehicle in the category 4WD– four-wheel drive vehicles (except some of the hybrid/electric/luxury 4WD vehicles) that the Lessor agrees as appropriate for being driven on such roads. A breach of this Article authorizes the Lessor to collect fees from the Renter, according to the price list of the Lessor at any given time. The aforementioned provision on fees does not affect the Renters liability regarding damage. c. Driving under the influence of any intoxicants. d. Driving in or across rivers or any kind of watercourses. Such driving, is totally the responsibility of the Renter, cf. also Item i, Article 30. e. Driving in banks of snow and ice. F. Traveling internationally with the vehicle.

11) In the instance of collision or another accident, the Renter shall immediately notify the police, as well as the Lessor. The Renter may not leave the venue of collision or accident until this has been done and until the police has arrived, or a damage report has been prepared. The Renter shall immediately fill out the damage report if damage has occurred. If the Renter does not report the damage within 12 hours from its occurrence, the Renter is fully liable for the damage and shall in such instance pay for it in full irrespective of the collision damage waiver (CDW or SCDW) that is attached to the insurance taken out by the Renter at the beginning of the rent. In cases of damage to the rental vehicle, the provision of a replacement vehicle is entirely the decision of the Lessor.

12) The Renter agrees to pay the Lessor a required deposit in the estimated amount of the rent and/or other charges the Renter may be subjected to regarding the rent such as insurance and etc.

13) The Renter is not authorized to have repairs or changes made to the vehicle and its attachments or to place them as guarantees without the prior written consent of the Lessor.

14) The Renter is responsible for all parking tickets and fines for traffic violations. The Lessor reserves the right
to collect an administration fee from the Renter, charged to his credit card, according to the Lessor’s price list,
if it turns out that the Lessor has to pay parking tickets for the Renter and/or inform the authorities about the Renter
because of traffic violations. The same applies regarding the payment of taxes to public authorities arising from the use of the vehicle, such as the per kilometer fee.

15) The Renter is not authorized to use the vehicle for transporting passengers against payment, lend it or sub-lease it.

16) The Renter shall pay all collection costs that fall on the Lessor if the Lessor launches collection measures because of this rental agreement.

17) The Renter is responsible for all expenses derived from transporting the vehicle to The Lessor’s location, as decided by the Lessor, in the event of transportation because of an accident or damage to the vehicle, or for other reasons. In such instances the collision damage waiver on insurances has no impact. The renter is responsible for all expenses related to road assistance, except when article 21 applies.

Obligations of the Lessor:

18) The Lessor guarantees that the vehicle meets the requirements made on it.

19) The vehicle shall be made available to the Renter with a full fuel tank.

20) The Lessor guarantees to do its utmost to make the vehicle available at the agreed hour. If the vehicle is presented to the Renter more than 8 hours after the agreed rental hour, the rent for said day shall be dropped.

21) If the vehicle malfunctions because of normal wear and tear, or for other reasons for which the Renter cannot be at fault, the Lessor shall make another vehicle available to the Renter as soon as possible or see to it that the repairs are made as soon as possible at the location decided by The Lessor. The aforementioned does not affect the payment of the rent or other which the Renter should pay according to this rental agreement. The Lessor pays no compensation in the instances stated above, either because of accommodation or other. In the case of a vehicle malfunction, the lessor must be notified.

22) The Lessor shall inform the Renter of the contents of this rental agreement, particularly the obligations the Renter undertakes by signing it.

23) The Lessor shall to the extent possible inform foreign Renters about the Icelandic traffic regulations, the traffic signs and the rules prohibiting off-road driving, as well as the hazards caused by the presence of animals on the roads.

24) If The Lessor wishes to limit the use of a vehicle with respect to its structure and/or the conditions of the roads, in other respects than stated in this rental agreement, this shall be done in writing upon the signing of this rental agreement.

25) The Lessor guarantees to always have valid liability insurance for its operation.

26) The Lessor is not liable for the disappearance of items or damage to them, which the Renter or another party kept or transported in or on the vehicle.

 Coverages and own-risk fee (Collision Damage Waiver – CDW and SCDW)

27) The rental fee includes the mandatory vehicle insurance, i.e. liability insurance and accident insurance for the driver and the owner.

28) Third-party liability insurance and the accident insurance for the driver are to the amount stipulated by Icelandic law at any given time. The Renters own-risk because of damage to the rented vehicle may amount to the full value of the vehicle; cf. a further stipulation of own-risk on the front page of this contract.

29) The Renter may pay an own-risk fee (CDW and SCDW) and thereby reduce his or her financial liability in case of damage. The amount of the own-risk fee is according to the price list of the Lessor. Notwithstanding the payment of the own-risk fee, the Renter is always obligated to pay a minimum amount in the event of damage to the rented vehicle during the time the vehicle is at the responsibility of the Renter. This amount is determined in the price list of the Lessor. Each own risk only applies to one incident. In instances of more damage that obviously did not occur at one and the same time, each own-risk CDW and SCDW applies to only one incident.

30) The amounts of own-risk fees (CDW and SCDW) vary, depending on how high the amount of damage they apply to. In respect of own-risk fees (CDW and SCDW) and to which damage amounts such payments apply, a reference is made to the price list of the Lessor, which is deemed as being a part of this rental agreement, if an own-risk fee (CDW and SCDW) is paid.
The payment of an own-risk fee (CDW and SCDW) does not reduce the Renters financial liability because of
damage to the vehicle in the following instances:
a. Intentional damage or damage resulting from major negligence by the driver. b. Damage resulting from the driver
being under the influence of intoxicants or is in other respects incapable of controlling the vehicle in a safe manner.
c. Damage resulting from racing or test-driving. d. Damage resulting from warfare, revolution, riots and/or civil unrest. e. Damage caused by animals. f. Holes burned into the seats, carpet or mats. g. Damage affecting only wheels, tires, suspension, batteries, glass, radio equipment, as well as damage due to the theft of individual parts of the vehicle and damage derived thereof. h. Damage caused by driving on rough roads, for example, to the transmission, the transmission shaft, oil pan or engine or other parts in or on the chassis of the vehicle, damage to the chassis of the vehicle caused by the vehicle bumping against uneven roads, for example, road shoulders caused by motor graders, rocks lodged in gravel roads or by the edges of roads. The same applies to damage resulting from loose rocks hitting the vehicle or the bottom of the vehicle or into the radiator when being driven. i. Damage resulting from the vehicle being driven in areas where driving is banned, for example, driving on paths, tracks, banks of snow, ice over or in unbridged rivers, streams or other watercourses, on beaches, places that are only accessible during low tide or other trackless areas. j. Damage to passenger vehicle caused by driving on roads marked with an F in public maps and on the Kjölur (nr. 35)and Kaldidalur (nr. 550) roads, and roads to Landmannalaugar (nr. 208), k. Damage to the vehicle caused by sand, gravel, ash, pumice or other kinds of earth materials being blown against it. l. If the vehicle is shipped by sea, the payment of the own-risk fee does not apply to damage caused by seawater. m. Any loss to the Lessor caused by the vehicle being stolen. n. Water damage to the vehicle.

31) Subject to the payment of special fees, TP (Theft Protection), SAAP (Sand And Ash Protection), WP (Windshield Protection), the Renter can reduce his or her financial liability for damage derived by the vehicle being stolen, damage caused by ash and sand being blown onto the vehicle and damage to the front windshield and the headlights of the vehicle. Notwithstanding the payment of such fees the Renter must always pay a minimum Non-Waivable Excess amount if the vehicle is damaged while at the responsibility of the Renter. This amount is determined in the price list of the Lessor.

General provisions:

32) The Lessor is authorized to take possession of the vehicle at its discretion and without notice if it has been illegally parked or has been used in a manner that does not conform to this rental agreement or law and regulations, or if the vehicle appears to be abandoned, or if the renter has any outstanding debts to the lessor.

33) Subject to the payment of special fees, TP (Theft Protection), SAAP (Sand And Ash Protection), WP (Windshield Protection), the Renter can reduce his or her financial liability for damage derived by the vehicle being stolen, damage caused by ash and sand being blown onto the vehicle and damage to the front windshield and the headlights of the vehicle. Notwithstanding the payment of such fees the Renter must always pay a minimum Non-Waivable Excess amount if the vehicle is damaged while at the responsibility of the Renter. This amount is determined in the price list of the Lessor.

34) If the vehicle is badly treated, used to transport pets or if someone smokes in the vehicle the Renter will be liable for a cleaning fee according to the Lessor price list.

35) The Lessor is authorized to charge to the Renter’s credit card the rental fee and other charges the Renter should pay according to this rental agreement, including payments because of damage to a vehicle while in the possession of the Renter, and also because of lost rental days because of damage, taking into consideration the utilization ratio of the Lessors fleet. The Lessor alone shall hold the power to decide when this is done and whether done in one transaction or not. This right remains intact for six (6) months after the vehicle has been returned to The Lessor.
The Renters signature to this rental agreement equal’s the Renter’s signature to credit card withdrawals because of the payments that The Lessor charges to the Renters credit card and which The Lessor should rightfully receive on grounds of the provisions of this rental agreement.

36) The Renter confirms with his signature to this rental agreement and to the rental vehicle condition report form ((RVCR ) that he received the vehicle and attachments in sound condition.

37) This rental agreement shall always be in the vehicle while at the responsibility of the Renter.

38) Any amendments or annexes to this rental agreement are subject to being made in writing and confirmed with the signatures of both parties to the agreement.

39) This rental agreement and agreements entered into on grounds of the aforementioned provisions, as well as claims for damages that may subsequently be made, fall under the auspices of Icelandic law. This applies both to the grounds and calculation of compensation. The same applies to claims for damages on grounds of liability outside of agreements. A case arising over this agreement shall only be filed at the legal venue of the Lessor.

40) The Renter agrees by signing this agreement, should a vehicle sustain damage or loss of which the Renter is responsible for, that the following documents shall be considered as sufficient evidence regarding the cost and extent of such damage or loss, whether a civil case is filed or not:
1) Signed Rental Agreement
2) A vehicle condition report accepted and signed by Renter at the start of rental
3) Lessor estimation of the damage cost
4) Photograph/s of damage/s on the vehicle.

41) Matters of disagreement between the parties to this rental agreement may be brought before the Arbitration Committee of the Icelandic Consumers Association and the Icelandic Travel Industry Association.

I accept liability on behalf of all responsible parties for all charges under the terms of this agreement for the full period of rental up to and after return of the rental vehicle, including unpaid parking, speeding or other statutory fines, administration fees, delayed or amended charges and any damage costs. I agree that all such charges may be billed to the credit card presented on this agreement or such other mechanism provided for payment. My signature below is deemed to have been made on a suitable credit card voucher.

Dollar is authorized to take possession of the vehicle at its discretion and without notice if the renter has any outstanding debts to the lessor.

I have examined the condition of the rented vehicle prior to my departure and agree that all vehicle damages are in compliance with the Rental Vehicle Condition Report attached to this rental agreement.

Early return: In case of early return of the rented vehicle no refund is available.

I accept that 2 wheel drive as well as plug-in hybrid, electric and luxury vehicles, unless otherwise specified are not allowed on roads marked with an F on public road maps and on the Kjöl (nr. 35), Kaldadal (nr. 550) roads, as well as on the road to Landmannalaugar (nr.208). Vehicles suitable for highland are listed in https://www.dollar.is/our-cars/ at any given time. (A breach of Article nr 10 in the Terms and Conditions of this rental agreement authorizes Hertz to collect a fee of 150000 from the Renter).

I have read and agree to the Terms and Conditions on both sides of this Rental Agreement and furthermore I’ve taken special note to articles that address insurance, Renters liability and circumstances where damage is not covered by insurance.

The terms and conditions are available in several languages upon request.