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Vehicle Related Payments

Individuals with reduced mobility may be entitled to a supplement for operation of a vehicle or supplement/grant for vehicle purchases. Physical mobility impairment refers to an illness or disability that significantly impairs the ability to get around. Blind people as well as others that do not have valid driving license may be entitled but must then have another household member to drive the car.

The aim of the grant and supplement for vehicle is to enable people with reduced mobility to work, go to school and seek regular rehabilitation or medical treatment.

You can apply for a supplement/grant to buy a vehicle every 5 years.

An application must be accompanied by a certificate of physical disability from a doctor. If the applicant has already submitted a mobility impairment certificate to TR, it is sufficient to refer to it.

TR may request the opinion of the Icelandic Health Insurance on the applicant‘s need for assistive devices and a car

Frequently asked questions

  • The applicant or another household member must have a valid driving license. Does not apply to those who live independently and have a personal assistant. In those cases, the person in question must have a contract with the municipality, e.g. personal assistance agreement, or similar agreement.
  • The car must be registered to the applicant/provider of a child or spouse (may be an operating lease or purchase lease)
  • The purchase price of the car shall not be lower than the amount of the grant/supplement. The grant/supplement must not have been paid before for the same vehicle
  • Supplement/grant may only be paid for passenger cars and vans that are for general use. Have in mind whether the applicant needs a van due to disability. All cars must be for daily use. 

Supplement for the operation of a vehicle is a monthly amount that is intended to cover the cost of operating a vehicle. It is a condition that the person in question has a mobility impairment assessment with TR and owns a vehicle that is inspected and insured.

Pensioners and those who receive disability grant may be paid a supplement for vehicle purchase that the beneficiary needs due to mobility impairment. Supplement may also be granted to the provider of a child with reduced mobility who receives childcare benefits.

Supplement for vehicle purchase is in the amount of ISK 360.000. For those who are buying a car for the fist time in their lives, the amount is ISK 720.000.

Grant in the amount of ISK 1.440.000 may be granted to buy a vehicle that is necessary because physical activity is restricted, or a body part is missing. Grants may also be awarded to the provider of a child with reduced mobility who enjoys childcare benefits in accordance with conditions:

  • The applicant must be physically disabled and be e.g. wheelchair bound and/or use two crutches majority of the time
  • The applicant must be covered by health insurance in this country

A grant of up to 50-60% of the purchase price of a vehicle may be granted, ie the base price without accessories, in the case of a person who cannot do without a specially equipped and expensive vehicle due to a severe disability.

The maximum grant is ISK 5.000.000. Before the supplement or grant is paid, information on the purchase price of the vehicle must be submitted. The purchase price of a car shall not be lower than the amount of supplement or grant.

Car tax rebate is applied for with Iceland Revenue and Customs (Skatturinn)

TR provides loans for people with reduced mobility to old-age pensioners, disability pensioners and disability grant recipients for the purchase of a vehicle, which is necessary due to the applicants reduced mobility.

  • It is also possible to provide a loan to the provider of a child with reduced mobility who receives home-care allowance
  • The same conditions apply for a loan as for the purchase of a vehicle
  • ISK 180.000 for those who are entitled to supplement for the purchase of a vehicle (ISK 360.000) according to the mobility impairment assessment
  • ISK 340.000 for those who are entitled to a grant for the purchase of a car (ISK 1.440.000) according to the mobility impairment assessment

Only severely disabled individuals, e.g. those who have to use two crutches or a wheelchair may be entitled to the higher loan.

The loan is based on the average interest rate on non-index bond loans. They are for three years and are repaid in equal monthly payments that are deducted from TR‘s payments.

  • If the applicant applies for a loan for the purchase of a vehicle and a supplement for the purchase of a vehicle at the same time, the purchase price of the vehicle shall not be lower than the combined amount of the vehicle loan and supplement (ISK 540.000)
  • If the applicant applies for a loan for the purchase of a vehicle and a grant for the purchase of a vehicle at the same time, the purchase price of the vehicle shall not be lower than the combined amount of the vehicle loan and grant (ISK 1.780.000)
  • If only a vehicle loan is applied for, the purchase price of the vehicle shall not be lower than the combined amount of the car loan and supplement/grant (ISK 540.000/ISK 1.780.000)