Terms Part 1:

a. Cancellation policy: Bookings cancelled more than 48 hours prior the pick-up time are fully refundable (100%).
Bookings cancelled less than 48 hours before pick-up time are non-refundable
In case of no-show or early returns, no refunds are available. All cancellations must be received by email to booking@fara.is or cancelled directly on the website at www.fara.is

b. Pick-up and Drop-off service: No additional fees levied for customer pick-up and drop-off at KEF Keflavík International Airport. Customers may also be collected at accommodation addresses in Reykjanesbær at no extra cost. Please contact us should you require other assistance.

c. Deposit Policy: Standard vehicle group: No deposit required (a credit card imprint will be taken). SUV/4×4, van and premium vehicles group: Basic (*) protection: 300,000 ISK deposit. Premium (***) protection: 50,000 ISK deposit.

d. Age requirement and driver license: The driver shall be at least 20 years of age and shall have held a driver’s license for at least one year before renting a vehicle. The Renter shall abide by Icelandic law and regulations when driving. The vehicle is under the liability of the Renter during the rental period, which, under this rental agreement, can never be less than until the vehicle has been registered as returned in the Lessor’s system. Registration of return can only take place during opening hours.

e. Late or Early returns: Late returns of more than one hour after the scheduled drop off time will result in additional rental days becoming chargeable. The renter(s) can return the vehicle earlier than the scheduled drop off time and in that case the renter(s) will only receive that price difference if the renter notifies Fara ehf car rental in writing at least 48 hours before scheduled pick-up; otherwise, there is no refund.

f. Fuel: Renter(s) are entirely responsible for all repair costs if a wrong fuel type is entered into the vehicle fuel tank. Vehicles are provided with a full tank of fuel on pick-up and should be returned with a full tank of fuel.

g. Vehicle Types: We reserve the right to substitute vehicles if the reserved vehicle type is unavailable, either with a similar or higher class.

h. Renters responsibility: Maintaining antifreeze/coolant and oil levels is the renter(s) responsibility. Any cost incurred will be reimbursed upon production of a receipt. Vehicles fitted with AdBlue system, Fara provides this filled up at the start of rental. Should more AdBlue be required during the rental, then the customer should refill this at their cost. It is critically important that the engine is not run without AdBlue being present. 

i. Malfunctions: Should any vehicle malfunction occur, any sign of overheating, the renter(s) must stop the vehicle immediately, or renter(s) will be held liable, and loss of bond may occur. The renter must contact Fara about the issue and await for an instruction from Fara about the response.

j. TAXES: Local value-added tax (VAT) 24% is included in all prices.

k. Payment: All foreign cards will subject to 3 – 5% processing fee depends on type of card used. Visa/Master card: 3%, Amex card: 5%. If you have specific requirements regarding payments or your car rental, please email us via booking@fara.is.

Terms part 2:

Obligations of the Hirer

1.The Hirer agrees to the following terms and conditions of hire contract for the vehicle specified in the agreement, hereinafter referred to as the vehicle. The Hirer has received a copy of the hire agreement and the terms and conditions. By signing the hire contract the Hirer confirms that he/she has read the contract, that he/she understands the contract and that he accepts the contract and the terms.         

2. The Hirer shall hold a valid driving license in his/her and must present the license on signing the hire contract. However, the Hirer is permitted to designate another driver in his/her place, provided that such driver presents in person his/her valid driving license at the signing of the hire contract.

3. The Hirer must present a valid credit card in his/her own name on signing the rental agreement, which the Owner is permitted to charge in accordance with article 36. The use of a credit card in another person’s name, other than that of the Hirer, is not permitted.

4. The Hirer shall return the vehicle:

a. In the same condition as when it was at collection along with all the accessories (including tyres and tools), with the exception of ordinary wear due to use.

b. At the time specified in the said rental agreement, unless other agreed later.

c. To the address of the Owner, unless other arrangements have been made in advance and agreed to by the Owner.

d. With a full tank of the appropriate fuel. If the vehicle is not returned with a full fuel tank, the owner is permitted to charge the Hirer for the missing quantity of fuel, together with a service fee according to the Owners tariff, which is available at Owner‘s place of business.

5. The Hirer shall pay for fuel and other costs related to operating the vehicle while the vehicle is in his/her care, which, in this contract refers to, is a time period no shorter than the time calculated from the time that the vehicle is delivered to the Hirer and until the Owner has entered the vehicle as received in the owner’s system, which can only be done during Owner‘s office hours.

6. If the Hirer fails to return the vehicle at the agreed time pursuant to this contract or fails to inform the Owner of his/her intention to extend the rental, the Owner or the police may seize the vehicle without further notice and at the expense of the Hirer. An extension of the hire is subject to the approval of the Owner. If the Hirer returns the vehicle one hour or more after the expiry of the agreed rental period, the Owner may change a hire charge for up to a whole day according to this hire contract. For each day thereafter, the Owner may charge fees according to the Owners tariff, which the Hirer has read.

7. The Owner may collect a separate cleaning charge according to the Owner‘s tariff, in the opinion of the Owner, the vehicle’s interior is excessively soiled on its return. The tariff is available at the Owner‘s place of business.

8. Smoking in the vehicle is strictly prohibited. If the Hirer violates this provision the Owner may collect a separate cleaning charge according to the Owner’s tariff, which is available at the Owner’s place of business and which the Hirer has read.

9. The vehicle shall be operated and driven with care. Only those registered drivers according to the rental agreement between the parties are permitted to drive the vehicle. The Hirer is liable for any damage resulting from the use the vehicle for which no compensation will be paid by the vehicle‘s insurance company, including damage to the vehicle and/or injury to passengers resulting from any of the following: 

a. Off-road driving, for example in paths and tracks, on beaches, in areas only accessible during low tide, or in other trackless areas.

b. Driving in water, across rivers or on any type of water course.

c. The driver‘s use of any intoxicants.

d. Vehicle use that contravenes Icelandic law and/or the provisions of these terms and conditions.

e. Any intentional act, intentional negligence or major negligence. 

f. Operating the vehicle under the conditions provided for tin this clause is also prohibited unless otherwise expressly provided in the agreement between the parties and/or these terms.

10. In addition to the points listed in Article 9 of those hire terms and conditions the Hirer is not permitted to the drive the vehicle in the following conditions:

a. Driving a vehicle which is not AWD/4X4 on roads marked F on official maps, as well as driving Kjalvegur (road 35), through Kaldidalur (road 550) and Jökulsháls route (road 570). Contraventions of this article are subject to fines imposed by the Owner on the Hirer, equivalent to the amount of the own risk according to the Owner’s tariff at any time. 

The above provisions on fines does not affect the obligation of the Hirer to compensation for any damage.

b. Driving AWD/4X4 vehicles classified by FARA as „SMALL “on roads F-88 and F-894 (Oskuleid), F-249 (Thorsmork) and F-578 (Arnarvatnsvegur). Contraventions of this prohibition are subject to fines imposed by the Owner on the Hirer, equivalent to amount according the Owner’s tariff at each time. The above provision on fines does not affect the obligation of the Hirer to pay compensation for any damage. However, driving larger AWD/4×4 vehicles/jeeps on these roads is permitted, provided that the Hirer exercises utmost caution. 

c. Driving in snowdrifts and on ice.

11. In the event of a collision or an accident the renter shall immediately notify the incident to the relevant police authorities as well as the Owner and is not permitted to the leave the scene until the police have arrived. The Hirer shall promptly complete the damage-report form if damage has occurred. If the Hirer does not promptly report damage to the vehicle that occurs during the rental period, He/she will be held fully liable for the damage.

12. Should the Owner need to the collect the vehicle or have it collected after a collision or an accident, the Hirer is responsible for all costs as specified in the Owner‘s tariff as current at any time. Should the Owner and/or the Hirer need the service of a third party salvage or transport the vehicle, the cost such salvage will be in accordance with the salvager‘s tariff, which the Hirer shall read before utilising the services of the salvager. The Hirer has read the Owners tariff, which is available at the Owners places of business.

13. The number of kilometres (KM) that the vehicle has been driven while this agreement is in effect is determined by reading the standard odometer supplied by the manufacturer of the vehicle. The Hirer shall notify the Owner as soon as possible if the meter is out of order or malfunctions during the hire period.

14. The Hirer agrees to pay the Owner on request:

a. Deposits, if applicable, equivalent to the exceed rental cost.

b. All expenses incurred by the Owner for reasons of having to return the vehicle to the Owner‘s premises in the event of the vehicle having been left unattended, without regard to its state, road conditions or weather.

c. Fines and handling fees due to penalties (according to the tariff available at the place of business) that may accrue to the vehicle while the vehicle is in the Hirer‘s care.

15. The Hirer is not permitted to have the vehicle or it‘s accessories repaired or changed and is not permitted to allow any pledge of the vehicle without prior consent of the Owner.

16. The Hirer is response for parking tickets and fines for driving and road traffic violations.

17. The Hirer is responsible for his/her driving and for ascertaining driving conditions at any time. The Owner is not liable for any damage to the vehicle or other costs that accrues as a result of weather, road conditions or road barriers. Some insurance terms will be diminished in strong wind conditions.

18. The Hirer is not permitted to use the vehicle or offer transportation of passengers for payment, lend the vehicle or sublet it.

Obligations of the Owner

19. If the Renter is insured by a third party it is the responsibility of the Hirer to read the terms and of his/her insurance. The Renter is liable for any damage that results from the use of the vehicle and shall pay for such damage in accordance with these terms and conditions and the insurance held the Owner. The Renter himself/herself is responsible for collecting any reimbursement from any third party in respect of any third-party insurance.

20. The Owner undertakes to do his utmost to deliver the vehicle at the agreed time and in compliance with all requirements. 

21. If the vehicle breaks down due to ordinary wear or for other reasons for which the Owner cannot be held responsible, the Owner shall deliver another vehicle to the Hirer as quickly as possible or ensure that the vehicle is repaired as quickly as possible at ta location decided by the Owner. The above does not affect the payment of rental fees or other fees that the Hirer is obliged to pay according to this rental agreement. The owner will not pay any kind compensation in the above cases, neither for accommodation nor for other reasons.

22. The Owner shall inform the Hirer of the substance of this rental agreement and specifically of the obligations which the Hirer undertakes on signing the agreement.

23. The Owner shall, to the extent possible, inform foreign Hirers about Icelandic traffic rules, traffic signs and rules prohibiting off-road driving. Furthermore, the Owner shall inform the Hirer of the risks posed by animals on the roads, gravel roads and icy roads.

24. If the Owner wishes to impose restrictions on the use of the vehicle in light of its equipment and/or road conditions, such restrictions must be established in writing upon the signature of this hire agreement.

25. The owner undertakes to hold professional indemnity insurance at all times.

26. The Owner cannot be held responsible for the disappearance of or damage to property that the Hirer or a third party stores or transports in or on the vehicle.


27. Included in the rental charge are all statutory motor vehicle insurances, including third-party liability insurance and personal injury for the driver and the owner, with which the Hirer has already familiarised himself/herself.

28. Third-party liability insurance is the amount stipulated by Icelandic law at any given time. The excess/deductible amount payable by the Hirer in the event of damage to the vehicle shall amount to up to the full value of the vehicle, cf. further specification of the amount relating to personal liability in the rental agreement.

29. Super CDW, this may be taken, as an addition to CDW, at the place of rental. This policy reduces the excess/self-risk from the mandatory maximum down to 550.000 ISK, unless the damage is the result of theft, burglary or other exempted instances. When SCDW is taken, damage to the front windshield is covered with the same excess amount.

30. The CDW does not cover: 

a. Damages caused intentionally or due to the gross negligence of the driver or Hirer.

b. Damages resulting from the driver being under the influence of alcohol, stimulants or sedatives or being otherwise incapable of operating the vehicle safely.

c. Damages due to racing or test driving.

d. Damages due to war, revolution, rioting or public unrest.

e. Damages caused by animals.

f. Holes burned into seats, carpets, lour mats, vehicle panels or bodywork.

g. Damages affecting only wheels, tyres, suspensions, batteries, glass, windows, radio, as well as damages caused by theft of induvial parts of the vehicle and damages resulting therefrom.

h. Damages caused by driving on rough roads, such as to the gearbox, transfer box and other parts in or under the chassis, damages to the chassis caused by scraping over uneven surfaces such as ridges left by road graders, protruding rocks fixed to the ground or roadways or areas adjacent to the edge or roadways. The same applies to damage from stones flying off the road surface and striking the underside of the vehicle during driving. 

i. Damages caused by driving in places where the vehicle is not permitted to be driven, such as on tracks, rough trails, in snowdrifts or on ice, driving across unbridged rivers or brooks, on beaches, through areas accessible during low tide or other off road areas. However, the insurance compensates for damages that are caused when the driver has demonstrably been forced to leave the main road, for example due to repairs. 

j. Damages to passenger cards that occur while the vehicle is driven on roads that are F- marked on official maps and the roads specified in point (a) of article 10.

k. Damages to AWD/4×4 vehicles classified as small caused by driving on F- marked roads specified in point (b) of Article 10.

l. Damages caused by sand, gravel, ash or pumice or other earth materials that are blown onto the vehicle.

m. Water damage to the vehicle.

n. If the vehicle is transported by sea, damages caused by sea-water are not compensated.

o. In other respects, reference is made to the general terms and conditions of the Collision Damage Waiver.

31. Sand and Ash Protection, SAP, this covers damage to the vehicle resulting from external objects such as: ash particles, sand, small rocks or debris being blown into the vehicle in high winds. The policy covers damage to paint, glass, lights, plastic parts, tyres and wheels. SAP reduces the renter’s cost to a mandatory excess amount payment stated in the rental agreement.

32. Gravel Protection, GP, covers damages to the windscreen, headlights, front bumper, mirrors, the bonnet or any other part of the vehicle when gravel are thrown onto the vehicle by another car, machine or person. Damage to the radiator, engine or transmission is not covered.

33. Not applicable.

General Provisions

34. The rental agreement, together with these lease terms, must always be kept in the vehicle during the rental period.

35. Additions and changes to the lease terms and the provision of the rental agreement shall be in writing.

36. The Owner is permitted to charge the hire costs to the Hirer‘s credit card as well as other costs payable by the Hirer according to the rental agreement. The time of payment and whether it is to be made in a lump sum shall be at the sole discretion of the Owner. This right shall remain unaffected for six months following the return of the vehicle to the Owner.

37. The Hirer confirms with his/her signature on the car rental agreement and the terms and conditions to have received the vehicle and it‘s accessories in good conditions. Should any minor damages be present on the vehicle then this will be noted within the documentation.

38. If the vehicle is damaged during the renal period as a result of a collision or for other reasons, the Hirer is only entitled to a new vehicle within effective term of the agreement provided that the damage will be compensated according to the provision of the rental agreement, as provided in Article 27. In the event of damages not covered by the insurance of the vehicles, as provided in the Article 30, a new vehicle will not be provided to the Hirer for the remainder of the hire period, the same applies if the damage is caused by the Hirer through gross negligence or intentionally, or it falls under the provision or Articles 8 and 10 of the hire terms and conditions.

39. The contract is concluded and effective on the basis of the above terms and conditions, including possible claims for compensation that may be, as applicable shall be governed by Icelandic law. This applies to both the basis and calculation of compensation. The same applies to claims for compensation based on on-contractual liability.

40. In the event of a dispute arising as regards the interpretation or execution of this, both parties shall endeavour to resolve such dispute through negotiation. If an agreement cannot be reached, the sae may be brought before the Reykjavik District Court.