KEF is a small airport that handles a lot of people at badly timed hours. Everything you need sits in one hall, but the order you do it in decides whether you drive away in 40 minutes or 90. Here is the sequence that works, including the parts most guides skip.
Off the plane you walk a long glass corridor. Then passport control, then baggage, then a duty free shop you have to walk through, then the arrivals hall. That is the whole airport.
Budget 40-60 minutes from wheels-down to sitting in a car. The worst window is roughly 06:00-08:00, when the North American red-eyes land inside the same hour and the border hall fills up. If you land then, accept it and stop worrying about your rental pickup time.
The arrivals duty free sits between baggage reclaim and the exit. You will see Icelanders off your own flight loading trolleys with beer. They are not being funny. Alcohol is sold through the state monopoly Vínbúðin at heavy tax, and arrivals duty free runs roughly 30-50% cheaper.
Rough sense of the gap: a can of beer is around €2 in duty free, €4-5 in Vínbúðin, and €10-14 in a Reykjavík bar. A litre of decent gin is around €25-30 against €45-55 in town.
The allowance is limited and combinable. A board at the shop entrance lists the exact combinations, and staff will tell you if your trolley is over. The common version is 1 litre of spirits plus 0.75 litre of wine plus 3 litres of beer, with swaps allowed if you skip the spirits.
Not worth it: chocolate, salted liquorice, wool, lava salt, souvenir anything. All of it is cheaper in a supermarket twenty minutes later, and the wool is cheaper again in Reykjavík.
Iceland is in the EEA. If you are on an EU or EEA mobile plan, your data roams at domestic rates and you should buy nothing. Post-Brexit UK plans vary, so check yours before you fly rather than in the arrivals hall.
If you do need data, buy an eSIM before departure and install it on home wifi. Resellers run about €5-15 for 5-10 GB, which covers a week of maps, weather and road checks. The local networks are Síminn, Nova and Vodafone Iceland, all of which sell prepaid.
Physical SIMs from the terminal vending machine or the 10-11 shop cost more, around €20-30, and take longer. Airport wifi is free and works, so you can activate an eSIM while you wait for bags.
Coverage along Route 1 and in towns is genuinely good. It dies in parts of the Westfjords, the Highlands, some fjord tunnels and stretches of the east. Download offline maps for the whole country before you leave the terminal.
Iceland is effectively card-only. Cards work at petrol stations, hot dog stands, campsites, swimming pools and public toilets. Contactless is everywhere. Tipping is not expected.
There is an ATM in arrivals. You do not need it. In a week of driving you may never touch a banknote. If cash makes you feel better, €50 is plenty and you will probably bring it home. The currency exchange desk is worse value than the ATM, so ignore both.
What matters is the card itself:
There are two setups at KEF. The large international brands generally hold desks inside the arrivals hall, so you walk straight up. Many of the Icelandic companies run a free shuttle to a depot three to five minutes away, with pickup from the marked stop directly outside the exit doors. Shuttles run every 10-20 minutes and meet scheduled flights around the clock, so a 02:00 arrival is not a problem.
Your voucher says which type you booked and where the shuttle stops. Read it on the plane, not in the hall. A shuttle depot adds roughly 20-30 minutes versus an in-terminal desk, which is worth pricing in if you have kids or a tight Blue Lagoon slot.
The rule that catches people out: a credit card in the main driver's name is normally required for the deposit. Debit cards are often refused outright, and Apple Pay is not accepted for a deposit hold. If the card is in your partner's name, your partner is the main driver. There is no arguing this at the counter at 06:00.
Before you drive off, do the walkaround yourself. Photograph every panel, both bumpers, all four wheels, the windscreen and the roof, with the timestamp on. Stone chips are the most common end-of-hire charge in Iceland.
On insurance: the base CDW leaves an excess of roughly €1,500-3,000, so a zero-excess or super-CDW bundle at €20-40 per day is usually the sane call here. Gravel protection is worth it if you leave paved roads at all. Sand and ash protection is worth it specifically for the south coast between Vík and Skaftafell in wind, where one bad day can strip a car's paint. Theft cover is close to pointless. For the full breakdown before you book, use our Keflavík car rental comparison and the longer Iceland car rental guide.
Arrivals food is thin: a couple of cafés and a 10-11 that is open round the clock and priced accordingly. Do not do your trip shopping there. Drive 5-10 minutes into Reykjanesbær and use Krónan, Nettó or Bónus at normal supermarket prices. Bónus is cheapest but keeps short hours and closes around 18:30, so late arrivals should aim for one of the other two.
Fuel is around €2 per litre. N1, Orkan and Olís cover the country, and there is a station minutes from the airport. Rentals are usually full-to-full. Along the south and west of Route 1 you are never far from fuel. In the Westfjords, the east and the north-east, refill at half a tank rather than a quarter.
Driving basics that are enforced: headlights on 24/7, 50 km/h in towns, 80 on gravel, 90 on paved rural roads, speed cameras on the main routes, and no off-road driving at all. Fines for driving off marked tracks are enormous. Single-lane bridges go to whoever arrived first.
Check vedur.is for weather and road.is or umferdin.is for road status before each drive, not just on day one. Roughly November to April, studded winter tyres are fitted by law, so glance at the tyres in the car park during shoulder season and ask if they look like summer rubber.
The Blue Lagoon is about 20 minutes from KEF and sits between the airport and the city, which makes it a natural first or last stop. Book a timed slot in advance because it sells out, and expect entry from roughly €70. Check the day before you travel that it is actually open, since the Reykjanes eruptions have forced short-notice closures more than once.
Sky Lagoon is inside Reykjavík itself, so it suits people who want to get to the city first and soak later. Reykjavík is around 50 km and a 45-50 minute drive on a fast, dull road.
If you landed at 06:30 after a night flight, do not start the Ring Road that day. Either sleep, or spend two hours on the Reykjanes peninsula at Gunnuhver, Brimketill and the old lighthouse, which is 20 minutes away and nearly empty compared with the Golden Circle.
Route 1 is 1,322 km and fully paved. Seven days is the honest minimum to drive it without hating the trip, and our 7-day Ring Road itinerary splits it into drives that leave time to stop. F-roads into the Highlands legally require a 4x4, your insurance is void if you take a 2WD onto one, and river crossings are never covered by any policy. They typically open late June and close in September. More route and season detail sits in our Iceland guides.
Plan on 40-60 minutes. Hand luggage on a Schengen flight can get you out in 25-30. Checked bags plus a non-Schengen border queue plus a shuttle depot can push it past 90 minutes at peak morning hours.
No. Cards work everywhere, including small petrol stations, campsites and pools, so you can skip the ATM in arrivals. What you do need is a four-digit PIN, because unmanned pumps will not take a card without one.
Usually not. A credit card in the main driver's name is normally required for the security deposit, and debit cards are often refused. The hold runs €500-3,000 depending on the car and insurance level.
Yes. Rental companies at KEF operate 24/7 for scheduled flights, whether that is an in-terminal desk or a free shuttle to a depot minutes away. A 02:00 or 05:00 arrival is routine here.
For alcohol, yes. It runs roughly 30-50% below Vínbúðin and a fraction of bar prices. For chocolate, wool and souvenirs, no. Buy those in a supermarket or in Reykjavík instead.