I would get it booked now as you don't have to pay until a few days before. Yes, cars get booked out. We were there again last September and the car I had rented about 6 months prior was not available when we arrived.
Blue is often recommended and I used to recommend them. We have rented them on 5 trips, and the first 4 were great, but the last trip it was atrocious. Long story short, we were given a car with big dents, scratches all over, filthy dirty inside, would randomly just die, and it had 103,000 km on it. We did not get the car we reserved, and were given one that they said was comparable, yet on their website the one we were given was a lower price, so obviously not comparable. To finish it off, I emailed them when we got home and the GM included other people there in the email back to me, and one guy did not pay attention that my name was part of it and said I had no idea what I was talking about and that I was wrong. The GM did nothing about that even after I brought that to his attention. So yeah, I am not a fan of them anymore.
On our upcoming 8th trip this summer, we are headed up to Akureyri so are renting there, not at KEF, but the next time we will go with Lotus.