It's an island, so there are only two options to get to Iceland. Going by plane is the preferred solution by 95% of tourists, but some prefer to arrive in stye in Iceland by sea, or even take their own car on a ferry.
For fairly long family stays, this idea may prove to be wise. This country is really made for road trips and even rugged off-road adventures, so if you can save money on renting a vehicle, this can really lighten the budget.
Also, if you're into mobile home and campervan holidays, you can save tons of money.