Renting a car is the best way to see Iceland. With so many sights scattered over the underpopulated isle, you will want to have a car to help you explore the mysteries of the island. Iceland's booming tourist industry is set up to cater to travellers looking to rent a vehicle, so you'll have no trouble finding a company to suit your needs and your budget. For suggestions, and other planning resources, you can check out my Iceland Planning post.
While you could spend a lifetime exploring the hidden nooks and jagged volcanoes of Iceland, most travellers spend 7-14 days on the island, if only because it is very expensive. Many people choose to spend 7 days because Icelandair offers a FREE 7-day stopover at no extra cost (which is a really neat travel initiative, btw!)
I wouldn't recommend doing the Ring Road (the main highway that circles Iceland) in less than 7 days – that will be rushed. Even 7 days is a fast trip but it's possible with some planning, which is why I put together this post. So take a look!
Note: This itinerary works counter-clockwise around the island, though it really doesn't matter which way you go!
Iceland Budget Itinerary: Day One
Unless you have intrepidly arrived via boat, chances are you've landed in Iceland at Keflavik International Airpot (KEF). From here you will grab your car rental and be on your way! Depending on the time of year, southern Iceland is a great place to go whale watching. If that's a priority, you can head out to sea right off the bat! If not, head off to the Golden Circle for your introduction into the beauty of Iceland.
Many people would say go to the Blue Lagoon, but I would say don't bother – there are more secluded, hidden, and FREE hot springs elsewhere!
For accommodation, in Reykajavik or in one of the nearby towns, such as Selfoss.
Head east toward Seljalandsfoss and Skógafoss, two amazing waterfalls. Take a break at the secluded hotpot, Seljavallalaug. The water isn't the hottest, but the pool is rather secluded and really neat to relax in at night. If you are into hiking, check out the Fimmvörðuháls Trail. It is a 30km trail that goes from Skógafoss right into Þórsmörk National Park. It will take you over glaciers and across volcanoes, and will likely be the highlight of your trip. You can hike the trail in a day and either camp or rent a hut at the end of the trail. You can also just sample the trail, turning around when you're tired and heading back to Skógafoss. If you don't hike the entire trail, grab some accommodation in or around Vík (or camp right there at Skógafoss)
Explore the gorgeous black-sand beaches of Vík that stretch into the distance for miles. There are cliffs all along the southern coast where, from mid-May to mid-August, you might even spot some puffins.
Continue east with a stop at Svartifoss. If you want a shorter day, stay near Skaftafell.
The glacial lake Jökulsárlón is a must-see. There are boat tours available, but even just walking the coastline of the lake is incredible.
If you want a detour, head toward Djúpivogur. There is a small, hidden hot pot (natural spring) that makes for a cozy side trip. Just be warned: the water is SUPER hot!
Head to the cozy village of Seyðisfjörður. The route there is amazing, making the drive alone is worth the effort! It is something of a bohemian village, with lots of shops and local artwork. Hike one of the many nearby trail that overlook the village for some great views. (I had a rather peculiar experience when I visited)
If you skipped whale watching in the south, you've got another shot. Plenty of operators run their excursions out of the north, so book a trip if it's on your bucket list!
If not, spend the day exploring a few amazing waterfalls – Dettifoss and Goðafoss – as well as the Mývatn Lake area. There is a hiking trail around the lake, as well as a hot spring. Several Game of Thrones episodes were filmed in the area, so die-hard fans can even take a GOT tour. If you have time, squeeze in a quick visit to the Hverir geothermal area, too.
If you've been missing urban life, stay in Akureyri. If not, keep driving and stay at one of the many farm guesthouses in the area.
Head to the Snaefellsnes peninsula for some hiking in the national park. There are plenty of hills and volcanoes to trek, and there are very few people. Feeling adventurous? Book a glacier walk on Snæfellsjökull! You can walk to the edge of the glacier yourself, though it isn't advisable to hike along the glacier alone (though we did!).
Stay at The Freezer hostel, a really laid back hostel converted from an old fish factory.
Head south to Reykjavik, where you can spend the remainder of your time strolling the narrow streets and taking in the capital city. There are plenty of neat shops and great restaurants, and some museums worth visiting, too – like the Icelandic Phallological Museum (aka the Penis Museum)!
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There really is a lot more to Iceland than can be seen in 7 days, so soak in as much as you can – without rushing, of course. Just be sure to check out my Iceland tips before you go – they will save you some time, money, and hassle!