A costly lesson in Iceland

I am telling you a TRUE story of what happened to us during our vacation in Iceland. I hope you can spread this out to anyone who is traveling there just to be aware of some car companies that might do this to you, if you are as unlucky as us to encounter an accident.

On our Day 1, we picked up the car early in the morning, while it was dark, windy and rainy. The merchant told us they had checked the car conditions the night before and told us to inspect the car when there was daylight. He didn’t bother checking the car together with us, probably because the weather was bad. (The car was parked at an outdoor parking lot.) After less than 30 minutes of driving to Reykjavik on our manual Toyota Auris, the signal of the engine coolant appeared.

The red engine coolant signal as proof. (Please forgive me for the blurry picture.)

It was very dangerous to drive when it was drizzling with strong gusts, and to make things worse, vapor condensed on the windshield and lowered our visibility! We were wiping off the fogs on the windshields with napkins and a handkerchief.(My boyfriend had a gut feeling that there’s something wrong with the car while he is driving it. The car wasn’t easy to handle to him.) We contacted the car rental company several times until someone answered the call. He told us it could be something to do with shifting the gears. (I am not a mechanic, I don’t know what the reason is)

Okay, we drove very cautiously and gave the car a break for a few hours in Reykjavik for breakfast and grocery shopping at Bónus (this is where we get most of our groceries during our stay in Iceland.) At 12 p.m., We set off to Krisuvik after getting a Subway and some Dunkin’ Donuts. As we started driving, the signal appeared and disappeared intermittently and made us worry about it. We called again, and the person told us to ignore the signal and CONTINUE driving. We all knew that we should stop the car and seek for help at a gas station on the way. Fogging and coolant signal persisted. We were 15 minutes away from our destination, and we did not see any gas station along the way. Smokes started coming out of the engine, we stopped the car and couldn’t ignite the engine anymore.

We waited for 3 hours under the extremely cold weather until our car rental company came to tow our car and replaced us with another car. During the wait, many Icelanders stopped and asked if we needed any help. They were nice people! The car broke down in the middle of the one-way road.

The car rental company sent Mr. X, whom we contacted using the emergency number came.

He came with a credit card machine.

You know what is going to happen. He blamed us for the engine malfunction and wanted to charge us ISK 380,000, which was close to USD 4000 to replace the vehicle. WTH. How could a few youngsters afford to pay such an huge amount of money?! We were stunned. Of course, we were not willing to pay for it because we drove the car for less than 3 hours. There must be something wrong with the engine prior to the pickup. We paid for the most expensive insurance package the company could offer. I was assuming it to cover every kind of damage. This didn’t make sense at all!

If we didn’t pay the charges, they would probably ditch us on the highway in this crazy gusts in the middle of nowhere. We negotiated, and Mr. X charged us ISK 30,000 for the towing fees and 700 Euros for their so-called “Self-risk Fees”. (Apparently this is a fee that every driver should pay when his or her car is involved in an accident. I never understand what this is. It never makes sense to me that when Mr. A hit Mr. B, Mr. A has to pay for the damage cost too.) Mr. X said he would need to evaluate the car and see how much we need to pay atthe end of our rental. We got an automatic Kia Cee’d to replace the broken car and continued our journey.

Mr. X claimed that they had inspected the car the night before renting the car to us and blamed that it was caused by my driving. Yet the high-temperature coolant signal consistently appeared half an hour I drove the car out of their office. If the condition of the car was not suitable for driving, they should not advise us to continue driving and commented the car was fine.

He also secretly took the insurance policy documents away.

The merchant did not explain clearly what the charges were for (i.e., the cost breakdown to repair a car engine) and an invoice was not given when we made the payment. We didn’t realize that until he left. So we were left with nothing, no proofs, nothing.


On our third day in Iceland (December 31st, 2016), we noticed that they charged us another USD 2357.93 without our authorization and consent! They didn’t call us to inform us of the charges. (His “evaluation” was so quick because he charged us on new year’s eve and we did not receive any report about the car damage. I have to laugh at this nonsense. Haha.)

So there is a total of USD 3368.66 incurring on us. How is this on our first trip to Iceland? Not fun. Knowing that they might charge our credit card again without telling us in advance, we contacted the credit card company to cancel our credit card. (My boyfriend was busy making calls at the Thingvellir.) Should we think of canceling the credit card earlier, we could of avoid the second charge. :/

Thoughts: If the payment was meant for damage of the vehicle we rented during my vacation in Iceland, they should have conducted proper investigation and evaluation on the damage cost instead of placing charges on the customer right away without going through the necessary procedures. I call this extortion.

Post-Iceland Trip: We tried to request all the invoices and insurance policy documents, but they have not been responsive since January 5th, 2017. Because we didn’t have any document explaining what the charges were for, which was unfair to us. Our host in Selvogur helped us contacting the Iceland Consumer Center to seek for legal assistance on this matter. We contacted the credit card company to file a dispute. We also sought legal advice from the Pro Bonos in Toronto and tried to reach out to the Consul of Malaysia in Iceland. It took us more than four months to successfully dispute the second charge. Fortunately, the credit card company was being very helpful and took our side. However, the first charge was not disputed, what can we say? Because we chipped in the card into the machine. We could, if we tried disputing the first charge, but we decided to pay that USD 1010.73 just to cut this car rental company off our lives.

A copy of an invoice sent by the car rental company to the credit card company during the dispute. BS invoice. Do not think that those items on the list are the actual cause of the breakdown.

Post-accident thoughts: At the beginning of the rental, the merchant did not provide any insurance policy documents, did not explain the rental agreement clearly. We should have been very cautious about the policies, but we didn’t. So, it was our fault. I am not sure how they could charge us for the second time without our authorization at all. We recalled that the merchant copied our credit card information down. They might copy the CVV number too! Because the charges were stated as an online transaction on our credit card account (see picture below). This makes a lot of sense — with the credit card number, the expiry date, and CVV, you could make purchases online. Realizing this made me so mad, this is stealing information (I am not sure if this is legal.). But we couldn’t defend our stand, because we gave our credit card to the merchant at the first place when we picked up the car.

We grew and learned a lot from this ridiculous encounter. I take this as a costly lesson and move on.

Lessons to you:

  1. Go for big car rental companies.
  2. Before renting the car, understand what the insurance package covers, know it inside out.
  3. Avoid picking up car at night where you can’t inspect the car thoroughly.
  4. Go through everything (insurance policies, agreement, etc) before driving.
  5. Be aware of what the merchant do with your credit card.
  6. Ask for invoices, receipts, or whatever form of proof of your payment, and not just the receipt from the credit card machine.

I hereby would like to express my utmost gratitude to my Airbnb host and the car mechanic we met and everyone who helped us along the way to get back home.