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4x4 or car for Iceland trip

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We are planning a 8-day trip to Iceland in the first week of June and are wondering if it makes any difference between renting a 4x4 and a regular car. Based on road conditions and mountain road openings, we're finding that we can't go inland during our stay there anyway. Is this correct? Are there any other reason why we should rent a 4x4? We're on a tight budget. Thanks!

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