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Driving in Iceland

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I am part of a group of 5 travelling to Iceland for four nights at the end of April. We will be based in Reykjavik. Research so far means we'll probably spend a day or so in Reykjavik, see the Golden Circle sights, go to Blue Lagoon on the way to the airport on the last day, plus other things to be decided (any ideas welcome).

Is it worth hiring a car for the period or using a combination of public transport, taxis and bus tours? I don't know what the roads and weather conditions will be like in April and I hear that hiring a car can be very expensive. However the cost of tours, buses etc for 5 people seems to add up quite quickly.

Thanks in advance for any help/ideas.

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