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Iceland Travel Guide: Ring Road, Northern Lights, and What to Actually Budget

Iceland costs approximately £150 to £250 per person per day including accommodation, food, and a hire car. Here's how to plan the Ring Road, see the Northern Lights, and when to go for each experience.

Travel · 5 min read

Iceland Travel Guide: Ring Road, Northern Lights, and What to Actually Budget

Iceland's landscape sits on the Mid-Atlantic Ridge where the North American and Eurasian tectonic plates diverge, producing one of the world's most geologically active regions: approximately 30 active volcanic systems, geothermal fields visible across the country, and some of Europe's largest glaciers (Vatnajökull covers 8% of Iceland's land area). The result is a country where dramatic landscape experiences are accessible without long hiking or expensive logistics. (CC / Wikimedia Commons)

Iceland is among the most visited countries in Europe relative to population size (approximately 2 million visitors per year to a country of 380,000 people) and is consistently one of the most expensive destinations on a per-day basis. A realistic daily budget including a mid-range hire car, guesthouse accommodation, and basic self-catering or restaurant meals is approximately £150 to £250 per person per day for two travellers sharing costs. The high cost is partly offset by the concentration of extraordinary natural experiences in a compact, easily driveable country: the Ring Road passes within reach of geysers, waterfalls, glaciers, volcanic landscapes, and black sand beaches within a continuous circuit of approximately 1,322 kilometres. The Northern Lights are viewable from September to March; midnight sun is the summer compensation. These experiences cannot overlap: choosing your season defines what you will see.

When to Go

  • Northern Lights season (September to March): Aurora borealis requires darkness and clear skies. The lights are not visible in summer due to midnight sun. Peak aurora activity correlates with solar activity (the 11-year solar cycle; 2024 to 2026 is near solar maximum and Northern Lights activity has been exceptionally high). Practical tip: the Aurora Forecast app (Veðurstofa Íslands) rates forecast activity on a 0 to 9 KP index scale; KP 3 or above is typically visible from Iceland. You need to be away from light pollution: 20 to 30 minutes outside Reykjavik is sufficient.
  • Summer (June to August): Midnight sun, warmest temperatures (10 to 15°C), all roads including mountain F-roads open, puffins present on the Westfjords and Snæfellsnes Peninsula. The Midnight Sun Run and other events. Significantly busier and more expensive than winter.
  • Shoulder seasons (April to May, September to October): The best value balance: fewer crowds, lower prices, longer daylight in spring, autumn colours and first aurora in September.

The Golden Circle (Day Trip from Reykjavik)

The Golden Circle is the standard introduction to Iceland's geology and covers three major sites in approximately 300 kilometres of driving, manageable in a full day from Reykjavik:

  • Þingvellir (Thingvellir) National Park: UNESCO World Heritage Site and the original site of the Althing, one of the world's oldest parliaments (930 AD). Also the rift valley where the North American and Eurasian plates are visibly separating at approximately 2cm per year. Snorkelling in Silfra fissure (between the plates, with visibility exceeding 100 metres in glacial meltwater at 2 to 4°C) is one of Iceland's most distinctive experiences; guided tours cost approximately £150 to £200 per person.
  • Geysir: The geothermal field that gave geysers their name. The original Geysir erupts rarely now; Strokkur erupts every 5 to 10 minutes to approximately 20 to 30 metres. Free to visit; small visitor centre on site.
  • Gullfoss: A two-tiered waterfall dropping 32 metres into a canyon. One of the most powerful waterfalls in Europe by volume. Free access; the viewing path comes very close to the upper falls.

The South Coast

The south coast between Reykjavik and the Jökulsárlón glacier lagoon is the most visited stretch of Iceland and is driveable in a long day but more comfortably over two:

  • Seljalandsfoss and Skógafoss: Two major waterfalls accessible directly from Route 1. Seljalandsfoss can be walked behind in dry weather; Skógafoss (60 metres high) has a trail to the top. Both free.
  • Reynisfjara Black Sand Beach: Dramatic black basalt columns, sea stacks (Reynisdrangar), and powerful waves with genuine hazard warnings. People have been swept into the sea here; stay well back from the waterline even in calm conditions.
  • Vatnajökull and Skaftafell: Iceland's largest glacier and the national park surrounding it. Glacier hikes from Skaftafell are the most accessible way to walk on the ice; guided tours cost approximately £50 to £80 per person for a 3-hour hike.
  • Jökulsárlón Glacier Lagoon: Icebergs calved from the Breiðamerkurjökull glacier float in a lagoon before washing onto Diamond Beach (blocks of ice on black sand). A boat tour of the lagoon costs approximately £50 per person; the beach is free. One of the most photographed locations in Iceland.

The Ring Road (Route 1)

Route 1 (Þjóðvegur 1) circles Iceland in 1,322 kilometres and is entirely paved. Driving the full ring takes 7 to 10 days comfortably; 5 to 6 days is possible but rushed. The north and east (the Eastfjords, Lake Mývatn, Akureyri, and the Snæfellsnes Peninsula as a detour) are significantly less visited than the south and Golden Circle and reward the extra driving time with more solitude. Road conditions: iciness and wind are the primary winter hazards; check road.is (Vegagerðin) for real-time road conditions before driving. F-roads (interior mountain roads, marked with F prefix) require 4WD vehicles and are closed from approximately October to late May.

Budget Planning

  • Accommodation: Guesthouses along the Ring Road average £100 to £160 per night for a double room. Reykjavik hotels: £150 to £300. Camping (June to August): approximately £15 to £25 per person at official campsites.
  • Car hire: A small 2WD car from a local Icelandic provider (Sad Cars, Go Car Rental, Lotus Car Rental) costs approximately £40 to £70 per day in shoulder season; 4WD costs £70 to £120 per day. International chains (Hertz, Budget, Sixt) are more expensive. Book in advance in summer.
  • Petrol: Approximately £1.80 to £2.20 per litre. Plan routes around petrol stations in the interior; gaps of 200 to 300km without fuel are possible in remote areas.
  • Food: Supermarket self-catering (Bonus, Kronan) significantly reduces costs; a supermarket-bought lunch costs approximately £8 to £12 per person. Restaurant meals average £25 to £45 for a main course in Reykjavik, £15 to £25 along the Ring Road. The N1 petrol station chain serves decent hot soup and lamb soup for approximately £10.

Related: Svalbard Travel Guide: Polar Bears, Midnight Sun, and Arctic Wilderness | Northern Norway Travel Guide: Tromsø, the Lofoten Islands, and the Northern Lights

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