Hello friends,
Depends on how long you have and how intrepid you are.
The highlights near Reykjavik are the blue lagoon, geysir, gullfoss waterfall, thingvellyr parliament ground. You can do these in a few days.
Further afield you get into seeing glaciers and volcanoes. In the south-east is a fabulous glacier lagoon (jokulsarlon?), in the north you have the area around Isafjord in the westfjords with spectacular basalt mountains, in the north around Akureyri there's lake myvatn with myvatn nature baths (like the blue lagoon), godafoss and dettifoss waterfalls and volcanic desert terrain. It becomes a question of how long you want to spend.
Car rental seemed reasonable when I did it, bearing in mind it's an expensive country. Driving distances manageable though there's not a lot of civilisation beyond Reykjavik. The city is great for a couple of days - highlights are Hallgrim's church, Perlan dome viewpoint, and various museums about the Vikings, the Eddas, volcanoes, even a penis museum. (!)
You should be able to rent a small car for about 30 euros per day. That normally includes CDW (not to be confused with SCDW).
I would recommend that you shop around with companies that offer comparison between car rentals like -snip-. You should quickly find the best available price. You can also try calling the companies and try to bargain, there are a lot of unused rental cars due to an explosion in car rental companies in Iceland in 2012/13.
Be vary of all the extras. Don't buy extra miles if you are staying within Reykjavik (and nearby), distances are short! The Golden circle is only about 300km so most times the included km's will do just fine if you rent for a few days.
You don't need to stock up on extra insurance either. In many cases our credit card company will have your back if you damage the car. Reading the CC small print, put that on your to-do list before traveling.
Hope this helps.
[ Poster is affiliated with at least two of the sites recommended. ]
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