The widespread European economic crisis has been hard felt in Iceland.

A new report has revealed that the cost of a summer car rental for a period of one week can cost in the hundreds of thousands of Iceland kronur (ISK), with rental cars found in some locations for over ISK 100,000 – around $800 or Euro 631.

If any travellers are planning on heading to the picturesque northern destination, they should bear in mind that anything loner than three weeks, as a good condition second-hand vehicle can be bought for the same price.

According to local news source Frettabladid, the cost to hire a near-new Opel Corsa over a three week period from the majority of the national rental organisations will cost around ISK 292,600 (USD 2,400, EUR 1,800). However, the same make and model from 2001 with around 200,000 kilometres on the clock can be easily found for ISK 320,000 (USD 2,600, EUR 2,000) at a local car dealership. What makes the contrast even greater is that car hire in neighbouring Denmark, of which Iceland is still formally overseen, rental prices are on average at least 50 per cent cheaper, occasionally up to 65 per cent for some deals.

The price spike is seasonal, although the troubled financial state of the Island nation means that business operators are pressing travellers harder than ever for higher spends. Most are looking to capitalise on the pleasant summer months for visiting the country before tourist numbers and car rental demand begin to drop steadily as the winter sets in.