1. Definitions

Vehicle: The rented vehicle including its engine, drivetrain, bodywork, windows, tires, battery, tools, spare tire, keys, documents and all accessories or extras provided with the vehicle.

Renter / Lessee: The person signing the Rental Agreement and responsible for the vehicle during the entire rental period.

Driver / Additional Driver: Any person listed on the Rental Agreement and authorized to operate the vehicle.

Rental Period: The time between vehicle pickup and when North Star Rental confirms the vehicle return.

Accessories / Extras: Any equipment provided with the vehicle including GPS devices, Wi-Fi routers, camping equipment, sleeping bags, chairs, tables, roof boxes, roof tents and kitchen equipment.

F-Roads: Highland roads in Iceland marked with the letter “F” on official maps.

2. Driver Eligibility

Drivers must be at least 20 years old, hold a valid driver’s license for at least 12 months, and present their original physical license at pickup.

Only drivers listed in the Rental Agreement are permitted to operate the vehicle.

If the vehicle is driven by a person not listed in the agreement, the renter becomes fully liable for any damages, losses, fines, claims, and related costs, to the maximum extent permitted by applicable law.

3. Payment and Security Deposit

A valid credit card in the renter’s name is required at pickup. North Star Rental may place a security deposit pre-authorization depending on the selected insurance package.

The renter authorizes North Star Rental to charge the payment method provided for rental fees, insurance excess, damage repairs, towing or recovery, traffic fines and administrative fees, missing fuel, cleaning or smoking penalties, and lost accessories or keys.

North Star Rental retains the right to charge the payment method for up to six (6) months after the rental period ends.

4. Vehicle Substitution

North Star Rental reserves the right to substitute the reserved vehicle with a similar or upgraded vehicle if the originally booked vehicle is unavailable.

5. Vehicle Condition and Inspection

Inspection at Pickup

The renter and a North Star Rental representative shall inspect the vehicle together before departure. All existing damage must be recorded on the inspection report. By leaving the rental location, the renter confirms acceptance of the vehicle condition.

Photographic and Video Evidence

North Star Rental may document vehicle condition using photographs, video recordings, and digital inspection reports. These records may be used as evidence when determining responsibility for damage.

Post-Return Inspection

Vehicles may undergo additional inspection after return. Damage discovered after the renter has left the rental premises may still be charged if it occurred during the rental period.

Hidden Damage

Some damage may not be immediately visible, including undercarriage damage, suspension damage, mechanical damage, and electrical system damage. If such damage occurred during the rental period, the renter remains responsible.

6. Vehicle Return Conditions

The renter must return the vehicle at the agreed location and time, with all accessories provided at pickup, with the same fuel level as received, reasonably clean inside, and free of personal belongings and trash. Exterior washing is not required unless the vehicle is excessively dirty.

7. Night Return Liability

If the vehicle is returned outside office hours, the renter remains responsible for the vehicle until it has been inspected and registered as returned by North Star Rental staff.

8. Fuel Policy

Vehicles are delivered with a full tank unless otherwise stated. If the vehicle is returned with less fuel, missing fuel will be charged and a refueling service fee of ISK 2,500 will apply.

Using the wrong fuel type may cause severe engine damage and the renter is responsible for all repair and recovery costs.

9. Late Return

If the vehicle is returned one hour or more after the agreed return time, North Star Rental may charge one additional rental day. Rental extensions must be approved in advance.

10. Vehicle Use and Driving Restrictions

The renter agrees to operate the vehicle responsibly and according to Icelandic law. The following are strictly prohibited: off-road driving, driving on beaches or unmarked terrain, reckless driving or racing, driving under the influence of alcohol or drugs, commercial passenger transport, and subleasing the vehicle. Violation may result in full liability for damages.

11. Off-Road Driving Penalty

Off-road driving is illegal in Iceland. Violation may result in a penalty ranging from ISK 50,000 to ISK 300,000, in addition to liability for damages and environmental fines.

12. F-Road and Highland Driving

Driving on F-roads is only permitted with approved 4×4 vehicles. Driving a non-approved vehicle on such roads may result in fines, towing charges, and full liability for damages.

13. Weather and Road Conditions

Icelandic weather conditions change rapidly. The renter must monitor conditions through official sources including road.is, vedur.is, and safetravel.is. Driving during severe weather warnings is undertaken at the renter’s own risk.

14. Wind-Blown Door Damage

Strong winds are common in Iceland. Damage caused by doors being blown open may cost up to ISK 500,000 depending on severity. The renter is responsible for holding the door firmly when opening it.

15. Sand and Ash Damage

Volcanic sandstorms may cause severe vehicle damage. Damage from sand or ash may reach up to ISK 2,000,000. This damage is not covered unless Sand and Ash Protection (SAAP) insurance has been purchased.

16. Water and River Crossing Liability

River crossings and driving through water are extremely dangerous and may cause severe damage to the vehicle. Unless explicitly authorized by North Star Rental for specific 4×4 vehicles, river crossings are strictly prohibited.

Any damage caused by water entering the vehicle, including engine, electrical systems, or transmission damage, is not covered by insurance. The renter is responsible for full repair costs or vehicle replacement and all towing and recovery costs.

17. Towing and Recovery Charges

If the vehicle requires recovery due to renter negligence, the renter must pay ISK 450 per kilometer. Distance is calculated from and back to the North Star Rental office.

18. Traffic Violations and Administrative Fees

The renter is responsible for all traffic violations including speeding fines, parking fines, tunnel charges, and road tolls. North Star Rental charges an administrative fee of ISK 2,500 per case.

19. Cleaning Fee

Vehicles must be returned reasonably clean. If the vehicle interior is excessively dirty, a cleaning fee starting from ISK 20,000 may apply.

20. Smoking Fee

All vehicles are non-smoking vehicles. Evidence of smoking results in a minimum fee of ISK 35,000.

21. Lost Keys

Loss of keys may require replacement of the immobilizer system. Costs may reach up to ISK 120,000 depending on vehicle model.

22. Campervan Equipment Responsibility

For campervans the renter is responsible for proper use of diesel heaters, kitchen equipment, water systems, electrical systems, and camping furniture. Damage caused by misuse will be charged accordingly.

23. Abandoned Vehicle

If the vehicle is left unattended or abandoned, North Star Rental may recover the vehicle at the renter’s expense.

24. GPS Tracking

Vehicles may be equipped with GPS tracking systems used for theft prevention, accident investigation, fleet management, and unauthorized use detection. The renter consents to such monitoring.

25. Travel Conditions and Customer Expectations

Travel conditions in Iceland can be unpredictable and may include severe weather, strong winds, road closures, volcanic activity, and transportation disruptions. Such circumstances do not constitute grounds for rental refunds, compensation claims, or travel reimbursements. The renter is responsible for planning travel according to official information sources.

26. Personal Belongings

North Star Rental is not responsible for personal belongings left in the vehicle. Items found may be shipped at the renter’s expense.

27. Force Majeure

North Star Rental is not liable for delays caused by events beyond its control including extreme weather, volcanic eruptions, natural disasters, or transportation disruptions.

28. Governing Law

This Rental Agreement is governed by Icelandic law. Any disputes shall be handled by the District Court of Reykjanes, Iceland.

29. Acceptance of Terms

By signing the Rental Agreement or confirming a booking, the renter confirms acceptance of these Terms and Conditions, responsibility for the vehicle during the rental period, and authorization for North Star Rental to charge the payment method for any costs arising under this agreement.

30. Insurance Coverage and Optional Protection Packages

30.1 Mandatory Insurance

All vehicles rented from North Star Rental include mandatory insurance coverage as required by Icelandic law. This includes Third-Party Liability Insurance (TPL) and driver and passenger accident insurance. Third-Party Liability Insurance covers damage or injury caused to other persons, vehicles, or property in accordance with Icelandic law.

30.2 Collision Damage Waiver (CDW)

All rentals include Collision Damage Waiver (CDW). CDW limits the renter’s financial responsibility in case of damage to the rental vehicle. The renter remains responsible for the insurance excess amount specified in the rental agreement unless additional insurance packages are purchased.

30.3 Optional Insurance Packages

Gold Protection Package

The Gold Protection Package may include Super Collision Damage Waiver (SCDW), Gravel Protection (GP), Sand and Ash Protection (SAAP), and Theft Protection (TP). With the Gold Package, the renter’s damage excess is significantly reduced, although a reduced excess may still apply depending on the damage type.

Platinum Protection Package

The Platinum Protection Package provides the highest level of protection. With this package, most damage excess amounts may be reduced to 0 ISK, including certain bodywork, glass, tire, gravel, sand, and ash damage.

30.4 Insurance Exclusions

Regardless of the insurance package selected, insurance does not cover damage caused by off-road driving, river crossings or water damage, driving under the influence of alcohol or drugs, reckless driving or gross negligence, unauthorized drivers, intentional damage, driving on closed roads, or misuse of the vehicle. In such cases, the renter remains fully liable for all damages and costs.

30.5 Theft Protection

If the vehicle is stolen while properly secured and reported to authorities, theft protection may limit the renter’s liability depending on the selected insurance package. The renter remains responsible for theft if negligence contributed to the loss.

30.6 Tire and Glass Damage

Damage to tires, wheels, glass, or windshields may be covered depending on the selected insurance package. If no protection package is purchased, the renter is responsible for the full cost of repair or replacement.

30.7 Insurance Claims

In case of an accident or damage, the renter must immediately notify North Star Rental and provide any required documentation. Failure to report an accident may result in the renter being held fully liable for damages.