Iceland is a bucket list destination that all travelers should visit in their lifetime. However, because this country is so remote, traveling to and around Iceland can be extremely expensive. Luckily, with these cheap Iceland trip tips, you’ll be able to visit even if you’re broke.
With these tips on how to find cheap flights to Iceland, how to travel around Iceland on a budget, cheap places to stay in Iceland, how to eat cheap in Iceland and more, you’ll be booking your vacation ASAP.
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To begin, let’s do a little budget breakdown for what I personally spent. Money transparency is key when it comes to budget travel, so I want to be as honest as possible!
How Much I Spent On 5 Days In Iceland
| Expense | Cost (USD) |
| Flights and baggage fees | $78 |
| Accommodations | $227 |
| Car rental | $0 |
| Gas | $116 |
| Parking | $7 |
| Food | $96 |
| Activities and tours | $134 |
| TOTAL | $660 |
As you can see, the flight and car rental costs probably seem extremely low. In the next section, I’ll show you exactly how you can book cheap Iceland flights for this price too, even if you’re coming from the United States.
As for the car rental company, I’m want to be completely honest here. Our car rental was free because we were working with a car rental company named Lava Car Rental (who were great to work with, by the way) on a photography campaign.
Although this option isn’t available to everyone, I still have some fantastic cheap Iceland car rental tips below, so definitely read on!
How To Find Cheap Flights To Iceland
First, here’s how to find cheap flights to Iceland — or should I say, free flights to Iceland.
Our round-trip flights to Keflavik were free through a budget travel method called travel hacking. In essence, travel hacking is the responsible use of travel credit cards, travel credit card opening bonuses and travel credit card points to earn free flights.
I’ve traveled to over 20 countries thanks to travel hacking. Now, I teach people how to fly for free with travel hacking all the time in my ebook, the Budget Travel Bible.
And today, just for you, I have a free printable travel hacking cheatsheet with all of the dos and don’ts of travel hacking that you can download here.
This cheatsheet will tell you exactly what travel hacking rules to follow so that you can get free flights using credit card points without getting into any credit card debt.
How To Avoid Iceland Baggage Fees
Now, although we didn’t have to pay a single penny for flights, we did have to pay a checked bag and overweight bag fee.
Unlike the US, many European airlines charge extra for both carry-on bags and checked bags. Believe it or not, the overweight fee was cheaper than paying for two checked bags or two carry-on bags, so my husband and I shared one large, heavy bag.
If you’re flying alone, you probably won’t have to pay overweight fees (check your airline’s weight allowance, though). But, if you’re taking a cheap Iceland trip with a friend or family member, it may be worthwhile sharing one bag.
How To Travel Around Iceland On A Budget
Next, if you’re traveling to Iceland, you’re likely taking an epic Iceland road trip. (You can steal my Iceland road trip itinerary here.)
Obviously, to take a cheap Iceland road trip, you’ll need to know how to travel around Iceland on a budget.
Cheap Car Rentals In Iceland
Like I said earlier, our car rental was free because we were working with the car rental company. Normally, though, you can expect to pay a couple hundred dollars for a weeklong car rental.
For the cheapest car rental possible, I highly recommend you rent a car from a company that is located outside the airport, such as Lava Car Rental.
These car rental companies don’t have to pay rent to have a kiosk in the airport which means they can charge less for rentals. They will also pick you up at the airport in a shuttle bus for free to bring you to your off-site car.
Cheap Gas In Iceland
Furthermore, gas is expensive in Iceland. There isn’t any great way to work around this expense, except for the gas discounts you get with your rental car.
To get the discounts, all you have to do is tap the corresponding gas station key fob from your rental car’s keys onto the gas pump’s credit card reader prior to entering your credit card and filling up.
Even with the gas discounts you may or may not receive, expect to pay $100 every time you fill up. The best way to save money here is to travel in a group so that you can split the cost.
Speaking of which, let’s discuss how traveling in a group can also save you hundreds of dollars on accommodations.
Cheap Places To Stay In Iceland
There are few cheap places to stay in Iceland, depending on your travel style: backpacking (camping/hostels), camper van rentals and short-term rentals.
1. Cheap Backpacking In Iceland
Backpacking around Iceland, either by tent camping or staying in hostels, is a very cheap accommodations option in Iceland.
Iceland attracts thousands of backpackers every year. So, there are hostels and campsites available throughout the country.
However, this is a niche style of traveling that isn’t for everyone.
2. Cheap Camper Van Rentals In Iceland
Two, camper van rentals are also widely available, and as well as convenient for road tripping.
While camper vans are never the cheapest option in Iceland, thanks to higher rental and fuel costs, this may be a viable option for your cheap Iceland trip if you want to camp more comfortably.
You’ll also save money renting a camper van over paying for a rental car and hotel, as you get both transportation and accommodations for one fixed price.
Although, again, van life is not for everyone. If you’re looking for maximum comfort and bang-for-your-buck like I was, you’ll definitely want to go with this next cheap Iceland accommodations option: short-term rentals.
3. Cheap Short-Term Rentals In Iceland (Best Option)
Short-term rentals like Airbnb or VRBO are the best places to stay in Iceland on a budget. I recommend checking VRBO first because VRBO properties are often the same properties listed on Airbnb for a fraction of the cost.
Here’s why I love short-term rentals in Iceland so much.
First, you’ll have a kitchen, so you’ll save hundreds of dollars on food (we’ll talk about that next).
Second, you can sleep more people in a short-term rental home than a hotel room or camper van, which means you can divide the cost up between more people. This is how I was able to stay in Iceland for 5 days for less than $300 USD.
Third, to put it simply, you get to sleep in an actual bed for the same price (if not less) than a camper van or hostel. I don’t know about you, but I would much rather sleep in a plush, fluffy bed over a paper-thin sleeping bag.
This three bedroom apartment in Olafvik, Iceland (near Kirkjufell and Kirkjufellsfoss) was our favorite short-term rental that we stayed at during our entire cheap Iceland trip.
How To Eat Cheap In Iceland
Next, let’s talk about how to eat cheap in Iceland.
To eat cheap in Iceland, you need to buy groceries. Skip eating out.
Restaurant food in Iceland is grossly overpriced because of the cost to import foods to the island. There really aren’t any cheap eats in Iceland, minus perhaps a hot dog. Even then, you’re overpaying for a simple hot dog.
We ate out for soup (nothing fancy) once during the week, and it was $30 per person. We spent less than $100 per person on groceries for the entire rest of the week.
So, definitely opt for groceries.
The cheapest place to buy groceries in Iceland is Kronan. Kronan will have everything you need for your trip — meal ingredients, sandwich essentials, snacks, pre-made meals, fruits, vegetables, etc. — and our total cost was comparable to what we would pay for groceries in the US.
Other Iceland Trip Expenses To Budget For
Lastly, there are a few miscellaneous cheap Iceland trip expenses that you need to budget for: activities and tours, public toilets, and parking lot fees.
While most of the Iceland tourist attractions are free to visit besides parking, there are a few attractions that are worth the price.
One of these attractions is the famous Blue Lagoon, a naturally healing geothermal hot spring that has been converted into a full-service spa and resort.
Although Blue Lagoon will run you a minimum of $100 USD per person, the amenities and inclusions are very worth it.
Just be sure to book your tickets as soon as possible because it does sell out and prices do go up. You can buy your Blue Lagoon tickets here.
In addition, as I just alluded to, plan to pay to park at the main Iceland attractions. Not all of the parking lots will be paid, but it’s best to budget accordingly, nonetheless.
Luckily, all of the pay-to-park lots that we encountered accepted credit cards, so cash was never an issue.
Lastly, if you’re traveling from the US, it may come as a surprise to you that many public toilets in Iceland (and most other countries) are not free to use.
Using public toilets will only cost you a couple of dollars (most accept credit cards and Apple Pay), but, again, it’s best to budget accordingly, especially if you’re traveling with a large family.
Just like that, you know exactly how to take a cheap Iceland trip!
Have any questions more about traveling Iceland on a budget? Comment in the reply section below, or follow and DM me on Instagram. I’m happy to help!
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