Rent a car and self-drive touring around Iceland is no doubt the best way to travel Iceland. Knowing what to do and how to rent a car in Iceland might be the first thing you might be interested in, but after that, more ‘technical’ problems might come to your mind–are there any extra fees I need to pay on the road? If so, how much are they? How can I pay? Do I need a credit card or pay in cash?
To help you learn more about how to drive in Iceland and get well prepared before your arrival, we have all information about tunnels and tolls in Iceland and how to pay tolls in Iceland ready for you here, buckle up, Let’s Go.
Road tax in Iceland
In Iceland, road taxes have traditionally been levied on all vehicle owners, primarily based on fuel consumption. These taxes were included in the price of petrol and diesel, ensuring that the more a vehicle consumed, the more the owner contributed to road maintenance and infrastructure. This system was straightforward for conventional vehicles that rely on fossil fuels, as taxes were directly related to fuel purchases. The funds collected were used for maintaining and upgrading Iceland’s road network, which is crucial given the country’s rugged terrain and the wear and tear caused by fluctuating weather conditions
However, with the rise of electric and hybrid vehicles, which do not contribute to these fuel-based taxes, a new Road Tax Fee was introduced in January 2024. This fee applies specifically to electric, hydrogen, and plug-in hybrid vehicles, with charges based on kilometers driven rather than fuel consumption. This update ensures that all vehicle owners, regardless of fuel type, contribute to the upkeep of Iceland’s road infrastructure
New road tax implemented in Iceland on Electric and PHEV Cars
In compliance with Icelandic law no. 101, dated 27th December, the Icelandic government has introduced a new Road Tax Fee, effective from January 1st, 2024. This tax applies to electric cars, hydrogen cars, and plug-in hybrid vehicles, with rates set at 6 ISK (0,04€/$) per kilometer for electric cars and 2 ISK (0,01 €/$) per kilometer for plug-in hybrids, calculated based on the kilometers driven. While many car rental companies in Iceland have begun charging this extra tax to their customers, Hertz Iceland is proud to announce that we will NOT be passing this cost on to our renters.
We believe in offering a straightforward and cost-effective experience for our customers, especially those choosing eco-friendly transportation. Therefore, when renting an electric or plug-in hybrid car with Hertz Iceland, you can enjoy your trip with no additional road tax fees.
Our decision to absorb this fee reflects our commitment to sustainability and customer satisfaction. We want to encourage the use of electric vehicles for exploring Iceland while keeping the rental process simple and transparent for you.
For customers renting traditional fuel-based vehicles, please be aware that all standard fees and charges will continue to apply as outlined in our Rental Agreement.
If you have any questions about the new road tax or your rental experience, feel free to contact us. We’re here to help you enjoy Iceland with confidence and ease.
The ONLY Tolled tunnel in Iceland: Vaðlaheiðargöng tunnel
99.9% of the roads in Iceland are toll-free, only with one exception–the Vaðlaheiðargöng tunnel. Vaðlaheiðargöng tunnel was newly opened in 2020 in north Iceland outside Akureyri city. This tunnel connects the east bank of the Eyjafjörður fjord and Akureyri, which shortened the Route 1 Ring Road by 16km.
Vaðlaheiðargöng tunnel location Map
Toll price in Iceland
There is a fee per trip for each car to use the Vaðlaheiðargöng tunnel:
- Regular passenger car under 3.5 tons: 1,850 ISK per trip (one-way)
- Vehicles weight between 3.5 to 7.5 tons: 2,800 ISK per trip (one-way)
- Vehicles weight over 7.5 tons: 5,900 ISK per trip (one-way)
*Info updated April 2024
How to pay tunnel toll in Iceland?
The fee is required to be paid in full within a 24 hours time frame with a valid credit card online. You can pay for your single tip via the veggjald.is website here or with their official app ( Apple iOS; Android) after passing through the tunnel; OR, you can also pre-register your rental car’s license plate number details on the same website 24 hours before your trip and pre-pay the fee.
You will be fined if you cannot pay the toll fee online within 24 hours after (or before) using the tunnel.
A kind reminder to Hertz Iceland’s renters: the expense of toll fees and parking fees are on your own terms; please pay accordingly. If you failed to make your payments, Hertz Iceland would receive the cost+ fined tickets, and we would have to charge you the fined amount with an admin service fee.
Does it worth using the tolled tunnel?
The tunnel saved you from driving through the Víkurskarð road, a pass in the mountain range between the Svalbarðsströnd coast and Fnjóskadalur.
In summer (between late May and early September), the Víkurskarð road is relatively easy to drive with no stress when the snow is melted. By using the Vaðlaheiðargöng tunnel, you can enjoy a more effortless drive experience and a few minutes faster than the Víkurskarð road. If you are travelling along the Ring Road in summer, there is no absolute difference between using the tunnel and the Víkurskarð road.
In winter (between late September and early May), North Iceland will start snowing, and roads will become icy, snowy and challenging to drive; this also happens to Víkurskarð road. Sometimes, the Vikurskard road is even impassable in winter due to heavy snowfall and strong winds. If you are taking the Ring Road trip during winter, we highly recommend you take the Vaðlaheiðargöng tunnel when travelling between Akureyri and Godafoss.
Free Tunnels in Iceland
As mentioned, the Vaðlaheiðargöng tunnel is the ONLY tolled tunnel in Iceland. You will be able to use all of the tunnels listed below for free during your stay in Iceland:
- Hvalfjörður Tunnel: a tunnel used to be a tolled road but has been toll-free since late 2018. This tunnel is laid under the Hvalfjörður fjord, connecting Reykjavik and the west, and it is part of Route 1 Ring Road.
- Arnardalshamar Tunnel: Arnardalshamar tunnel is located in the Westfjords area along Route 61 and cuts through a basalt dike named Arnardalshamar. It is the shortest and oldest artificial tunnel in Iceland.
- Strákagöng Tunnel: Another tunnel located in Westfjords outside of Siglufjörður town, making the village more accessible during the winter season
- Héðinsfjarðargöng Tunnel: Hédinsfjardargöng are two tunnels, a 3.9-kilometer long tunnel between Siglufjördur and Hédinsfjördur and a 7.1-kilometer long tunnel between Hédinsfjödur and Ólafsfjördur.
- Múlagöng Tunnel: A tunnel located in East Iceland, connecting the towns Dalvík and Ólafsfjörður.
- Breiðadals & Botnsheiði Tunnels: It is a tunnel with a crossroads inside it. Located in Westfjords, the tunnel starts from Isafjordur and connects Suðureyri and Flateyri towns. You can easily access these two different towns at the crossroads in the tunnel from Ísafjörður.
For further tips on how to drive in Iceland safely, read our Driving in Iceland guide and learn everything about driving in Iceland.
