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Iceland - Driving and Hotels in March

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I am going to Iceland in March and wondered if anyone could tell me how easy it is to 'do' the Golden Circle tour if we hired a 4X4.. or does the weather become too extreme ? I also want to go to the southeast and am curious as to the type of clothing that should be worn ?

Finally.. have booked into the Radisson Saga.. is this better than the Radisson Island as a family hotel (child of 8 included!).

Thanks

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