I have used Sadcars a couple of times. Their cars tend to be higher-mileage than most hire cars but very much cheaper. Google for them - they have two depots; one near Keflavik and one in Reykjavik.
My boyfriend and I used SAD cars this past summer and we took the risk knowing they got pretty awful reviews all over the place since it was way cheaper (still pricey but that's everything in Iceland) and it seemed enough people get by not having a meltdown.....
but we regretted it majorly. First, I'm not usually one to complain about services being a little late - but we scheduled airport pick up and shuttle to the location which is about 15-20 minutes out and we waited at the airport for 2 hours before they showed up to pick us up (also sucked because we had pre-booked Blue Lagoon for that AM). When the guy from SAD cards did finally get to the airport, they didn't have enough space to take everyone who had booked and people had to be left behind at the airport for them to come back (they had waited 2 hours too...).
We got a little manual Yaris that worked for about a day until we realized there was an exhaust leak which gave us INSANE headaches and almost made both of us pass out. We'd have to keep getting out of the car to get air even with the windows open. We're talking pretty long drives depending on which locations you're going to.
But the best part was being about 3 hours out from Reykjavik and all of a sudden it sounded like a motorcycle gang rolled up behind us... Nope, apparently a part fell off the car while we were stopped waiting to cross a one-lane bridge. Spent the rest of the day hoping our little jalopy would get us back to Reykjavik (the noise and smell of exhaust bad enough- the number of dirty looks we received when our airplane rolled up into parking lots or intersections was borderline hysterical, still sort of mortifying) - by the time we got to their Reykjavik location (a hostel - not a location where there are cars, just a hostel next to a car garage) - had to leave it at the shop they used and we spent a few hours really unable to do anything while they replaced the catalytic converter or something-arother. All the while trying to navigate the situation with this poor Icelandic mechanic who didn't know English. The look on his face after looking at the car was priceless, he said in so many words that we were lucky to have made it back without it crapping out or killing us from the exhaust (we just kept the windows open the whole time, still pretty bad though).
We were SUPER lucky this happened during business hours or we would've been stranded essentially. Not much in the way of help, gas stations, people, or even places to pull off the road for the most part in Iceland.
After all was said and done, while it saved us $$, it cost us a LOT of time to deal with the headaches of this car (and that's literal headaches as well). Time you really can't get back. We wouldn't take the risk again. Plus it still cost us at least $500 for just a few days, so it's not like we saved THAT much to begin with... the extra couple of hundred bucks to not have those headaches or stress would've been worth it in retrospect. That said, to each his own... it was definitely an experience to say the least, haha.
