What are the major do's and don'ts when it comes to driving in Iceland?

What are the major do's and don'ts for driving in Iceland? Are all of Iceland's attractions reachable by car, and how do you go about renting a vehicle for your stay? What do you need to be aware of when driving in Iceland? Which side of the road do Icelanders drive on, and how's their reputation behind the wheel? Read on to find out all you need to know about driving in Iceland.

Given Iceland's wide and open landscape, it would seem that motorised transportation has become an essential element to travelling in the country. There are no trains, no underground systems, no trams - to get from A to B requires you to walk, cycle, take a taxi, take a bus or drive yourself. Other destinations require the need to find passage by ferry or a plane, but for the sake of argument, let's focus our attention on the trusty old automobile.  

Even though Iceland’s population only consists of around 330,000 people, the landmass itself is surprisingly large, only a tiny bit smaller than neighbouring England. In fact, Iceland is larger than Portugal and more than two and a half times the size of Denmark. Let's just say, this isn't an island in which you can see in only one afternoon...

Iceland’s major attractions—the glaciers, the fjords, the caverns and fissures— span the entirety of the country, filling every corner with colour and possibilities. Whereas it’s perfectly fine to walk or cycle within the capital, Reykjavík, the best way to get out of the city and explore nature is, undoubtedly, by car.

Taxis are very expensive—and surprisingly, buses are too. Besides that, taxi drivers are often unaccommodating if asked to drive all the way to East Iceland.  

Bus passports are available in the summertime, providing flexibility to travel to and from different areas of Iceland. These are provided by licensed coach companies and primarily travel to the major tourist destinations in Iceland. Utilising the bus passport is a convenient means of travel if you are planning on spending a large amount of time at each of your chosen locations. This would be particularly recommended for those looking to go hike longer trails, for instance. 

Iceland Public Transportation Bus Map

The local bus transport system, Strætó, runs all year long to selected towns. Usually, the only interruptions to the normal schedule occur when the weather is being truly tempestuous. Still, one should not rely on the local public transport; there are not many bus routes in the country and they run infrequently (perhaps only once per day). All in all, not the most reliable means of exploring this vast and diverse country. 

Of course, you also have the option of going on guided tours. Guided tours allow you to gain a real education whilst travelling, as well as providing company and the chance to experience Iceland at its most authentic. Guided tours range from sightseeing to action-packed activities, such as scuba diving and glacier hiking. 


Do I Need a Car in Iceland?        

There are, of course, other options for travelling, such as cycling. A car is by the far the simplest option, however.

Credit: Vimeo. 

As mentioned above, Iceland is not a small country. Traveling from one end of the country to the other can take about 8-12 hours by car (depending on start and stop locations).

Popular attractions such as the Blue Lagoon (30 minutes by car from Reykjavík) and The Golden Circle (5-hour drive in total) are serviced by buses daily—or even multiple times each day. Bus tours also go to various other tourist destinations, although mainly these are scheduled day tours that don’t offer much flexibility.

The country is mountainous and weather conditions change rapidly. The nature is breathtakingly beautiful and many people choose to explore new things like going on a glacier hiking tour or an ice cave tour.

Most people that do so, use an alternative way to reach their starting position, either a rental car or they go by bus. Hitchhiking is safe (and common) in the country, although not very dependable and not practical for a company of people or for people with a lot of luggage.

Car ownership in Iceland is amongst the highest in the world – and there’s a good reason for it. Because of it (or due to it) the bus system is expensive and infrequent. This also means that the best way for tourists to get around the country is by having their own car, that way they can also discover hidden secrets by exploring less used roads.

Renting a Car in Iceland          

There are a wide range of different vehicle types to choose from.

To keep things simple, Iceland has a paved Ring Road that circles itself around the island. This road is accessible by any type of vehicle and is thus the main vein that circulates Iceland's many attractions, towns and scenic stops. For the entirety of the road, there is only one lane going each way and you will find a tiny, tiny amount of traffic. Let's make it clear; in rural Iceland, traffic jams are unheard of.

To see updated information about which roads are open and their condition at any given time, visit road.is or call the number 1777 for information in English.

If you’re the adventurous type and plan on taking a Self-Drive Tour accessing the Central Highlands, then you’ll need to be driving a 4x4 WD.

Take note that off-road driving is illegal in Iceland; it damages the delicate nature and is punishable by high fines, fines which will likely surmount to more than the cost of your trip. Driving on highland tracks is not considered to be driving off-road and is not punishable by fines—you are only committing a serious offence if you leave the track and drive out into the unspoilt nature.

There are several car rentals in Iceland offering a variety of vehicles to choose from. 5 seater 4WD SUV’s or mini trucks— such as Subaru or Toyota—are popular outside city limits and hold plenty of luggage space for the serious traveller. The cheaper 4 or 5 seater Yaris is popular within city limits and on paved roads. They are notably smaller, however, and don't contain much luggage space.

Flexibility in Booking an Iceland Car Rental          

You will find car rentals in Iceland easy to approach and more than willing to help alleviate your worries whilst travelling here.

Most rental car companies in Iceland are flexible with pick-up and return dates, as well as pick-up and return locations. If you are working with a good rental company, flexibility is almost never an issue. Usually, you can pick your car up at Keflavík International airport (40-minute drive from Reykjavík) and drop it off there for a small extra fee.

If you are unsure of the length of time that you wish to rent your car in Iceland, you should ask the car company about their flexibility when determining which company to book with.

It is advisable to book in advance, especially for the summer season and if you want a specific car—but you are very likely able to rent a car in Iceland with a day’s or a few days’ notice.

Parking in Iceland         

Thankfully, parking in the capital city is largely free!

Parking spaces in most of the country are free of charge. Parking in central Reykjavík and central Akureyri may not always be free (general rule of thumb is if there’s a parking metre, then you have to pay!) 

Stopping or parking your car temporarily (just for a short while, to take pictures for instance - not overnight) on a side of a road in the countryside can be perfectly fine if there are no lines on the edge of the road, just make sure it’s not in the way of other cars and that it’s visible from all angles.

If it's dark outside, foggy or for some other reason bad visibility, then make sure you put your hazard lights on so other drivers can easily see you.

Parking Zones (and Prices) in Reykjavik          

There are four parking zones in Reykjavík. The way to know which zone you are in is to look at the P-signs that are located on lamp posts around the city. The metres and ticket machines also display which zone they are in. The basic rule is that the closer you are to Laugavegur (main shopping street) and the downtown area, the higher the zone. 

Reykjavik, Iceland Parking Zones

Red zone: 
230 ISK per hour.
Mon-Fri 9 am to 6 pm. Sat 10 am to 4 pm. 
Free on Sundays.

Blue zone:
125 ISK per hour.
Mon-Fri 9 am to 6 pm. Sat 10 am to 4 pm. 
Free on Sundays.

Green zone: 
85 ISK for 1st & 2nd hour. 20 ISK per hour after 2nd hour.
Mon-Fri 9 am to 6 pm. Sat 10 am to 4 pm.
Free on Sundays.

Orange zone:
125 ISK per hour.
Mon-Fri 8 am to 4 pm.
Free on Saturdays and Sundays.

Additionally, there are 6 parking garages in central Reykjavík that permit temporary parking. They are open from 7:00-24:00 every day.

These garages are called: Stjörnuport and Vitatorg (80 ISK first hour, then 50 ISK hourly), Kolaport, Vesturgata, City Hall and Traðarkot (150 ISK first hour, then 100 ISK hourly). 

Find updated availability for Reykjavík's parking garages here.

There is also additional parking available underneath Harpa Concert and Conference Hall, the price is a little higher, or 225 ISK hourly.

Hazards When Driving in Iceland           

These are some of the most common causes of road accidents in Iceland. By familiarizing yourself with them you will reduce the chance of you being involved in an accident. Above all else, please drive carefully and sensibly. 

  • Under-inflated or damaged tyres. Flat tyres are not covered by insurance.
  • Exiting the road due to slipping on ice or visual distractions.
  • Domestic animals—mainly sheep—crossing the road suddenly.
  • Damage to doors during stormy and windy conditions.
  • Losing traction on gravel roads.
  • Driving through rivers.
  • Driving in snowstorms.
  • Speeding.

Frequently Asked Questions          

To try and alleviate any concerns that you might have about driving in Iceland, we have included a thorough FAQ to answer your most commonly asked questions. If there are any questions you might have that you fail to see here, please make sure to include them in the Facebook comment's box at the bottom of this article, and we will be sure to answer them as soon as possible. 

Driving in a foreign country takes some forethought. It's always best to be wised up to the country's road laws.


What age must I be to rent a car in Iceland?

The minimum age to rent a passenger car in Iceland is 20 years old, for both reasons of insurance and safety. The minimum age to rent a 4WD or a minibus is 23 years old, as these vehicles require further experience and a more intimate knowledge of vehicle handling. You must present a valid driver’s license (held for a minimum of one year) at the time of rental as a means of proving your age.

What else do I need to rent a car in Iceland?

To rent a car in Iceland, you will need to have a credit card, a driver’s license in English (or with an official translation) and driving experience of more than one year. Take note that the individual who reserves the car does not need to be the intended driver. You will be asked to display your credit card and your driver’s license upon delivery of the car.

Those looking to rent a car in Iceland must be at least 20 years old.


How does picking up and dropping off the car work in Iceland?

Depending on which car rental company is listed on your voucher, a representative of the company may be waiting in the arrival terminal,  bearing either your name, the name of the rental company or your particular booking number. If you do not see a person bearing a sign with your name, you may need to take an airport shuttle to the rental offices near the airport.

You can also arrange to go directly to your accommodation in Reykjavik by taking a trip on the Flybus. You can have your rental car delivered to you in the city, but you must make prior arrangements with your car rental company before your arrival.

If you are unsure what to do, contact your chosen car rental company directly for help. The phone number will be printed on your voucher. You can also visit the car rental desk within the airport to further clarify any outstanding issues. 

At the end of the trip, you will, of course, have to return the car. To drop the car off at the airport, please follow the instructions that the rental representative will have given you upon the vehicle's initial delivery. To drop off the car in Reykjavík—or elsewhere than the location listed on your rental contract—follow the representative's instructions or leave the car keys with the reception of your hotel, letting them know the exact location of the vehicle. 

Leaving the car earlier than booked does not entitle the customer to a refund. Please notify the car rental company if you are going to leave the car earlier than expected.

Do you use manual or automatic cars in Iceland?

Most cars in Iceland are manual.

If you want an automatic car, be sure to ask the car rental companies directly!

Most cars in Iceland are manually geared. Make sure to specify if you need an automatically geared vehicle.

What car insurance should I take?

CDW is often included in the car rental price, with more optional insurances such as PAI, SCDW, GP, TP, SAAP/SADW and Premium Insurance. It's advised that you add gravel protection, especially if you are planning on driving the South Coast of Iceland or accessing the Central Highlands. 

It is important to know that all the insurance types are based on self-risk, meaning that any damages found to be the driver’s fault make them liable for X amount of the total damage. This is outlined in the CDW/SCDW section of their rental agreement.

Normally, CDW liability is around 350,000 ISK and SCDW is half of that. This can vary significantly across rental car companies, so be sure to ask your rental representative as to the specific price.

Some customers ask to waive the CDW since it is covered by their credit card. We do NOT recommend this because, in the case of an accident, the customer will be fully liable for all damages to people and/or property. Depending on the severity of the incident, it can be very expensive and must be paid up front. In the case of an accident, towing of the vehicle is not covered by car insurance and will have to be covered by the customer.

Damage done to the car on F roads, regardless of the car being a 4x4 or not, are not covered by the insurance policy. Customers proceed at their own risk. We advise all our visitors to avoid crossing rivers in any vehicle, which can be treacherous at any time of year.

Any damage to tyres, the undercarriage or engine are also not covered by this insurance. A few companies cover the tyres, but this is rare. In winter, all cars have winter tyres - required by law - but studded tyres are up to the car rental to install since they are not mandatory.

How fast can you drive in Iceland?

Standard speed limits in Iceland are as follows:

50 km/h (31mph) within cities.

80 km/h (49mph) on dirt roads.

90 km/h (55mph) on all other paved roads.

While you may not see police cars on the roads very often, there are active speed cameras hidden in many locations. Some of these speed cameras correspond with a sign around one hundred metres away informing you of their presence, others look to catch you out. If you are caught driving over the speed limit, you will likely receive a hefty fine.

In Iceland, vehicles travel on the right hand side of the road.

Which side of the road do you drive on in Iceland?

People drive on the right side of the road in Iceland. During the winter, this can be difficult given the invading snow-stacks, forcing drivers further centre into the road. If this is absolutely necessary, make sure to drive very slowly, keeping your eye out constantly for oncoming headlights and making suffcient room to allow them passage.

How much does gas cost in Iceland?

The price of gas (95 octane) is around 200 ISK per litre.  Diesel comes in at a little cheaper, with prices at around 190 ISK per litre. The price fluctuates somewhat and was around 250 ISK a few years back, in the summer of 2014. Here you can find an updated price list of gasoline and diesel in various gas stations in Iceland.

How much does it cost to rent a car in Iceland?

Small cars are from 5000 ISK to 20 000 ISK per day (50-195 USD or 36-147 GBP - rates from November 2017).

SUV’s are from 7500 ISK to 45 000 ISK per day (70-430 USD or 55-330 GBP - rates from November 2017). 

Large discounts apply for longer rentals and prices are about 100% higher in the summertime compared to wintertime. It's advised that you reserve your car rental early as it can sometimes be hard to find rentals during high season.

Are there any laws I need to be aware of?

It is mandatory for everyone to wear seat belts in all cars and buses in Iceland. It is also mandatory for children to sit in appropriate children seats that fit their age.

Many guests here will pull by the roadside safely to meet the Icelandic horses.

Are there many roundabouts, one way streets or difficult junctions? Anything else I need to know about?

Iceland's roads are generally only 1 or 2 lanes. In the centre of Reykjavík and the west part of town, there are several one-way streets, so it can be frustrating to navigate in a car for the first time. 

In the countryside, you may encounter some single-lane bridges or single lane tunnels. Before you enter, there will be a sign showing the right of way. Drive slowly so that you can stop the car on the slip roads provided.

There are a few roundabouts in Iceland, mostly when entering Reykjavík or near larger towns. The inside lane always has the right of way. You need to indicate when leaving the roundabout but not when you enter it.

If you are planning on exiting the roundabout on the second, third or fourth exit, use the inside lane. If you are planning on exiting the roundabout on the first exit, use the outside lane. 

If you enter the roundabout on the outside lane but don't exit immediately, then use the indicator towards the inside lane (but don't switch lanes) of the roundabout until it's time to exit, then switch the indicator to the direction of your exit. You can never switch lanes after you have entered a roundabout. There are never more than 2 lanes in roundabouts in Iceland.

There are not many complex junctions, only a couple of flyovers—underpasses and overpasses within Reykjavík.

What should I do if I run into trouble or there is an emergency?

The emergency number in Iceland is 112.

If your car breaks down or you have a flat tyre, then contact your rental car office for information. There is no official road assistance in Iceland, but you can contact safetravel.is for information about the nearest help centre or car repair.

Highland roads are monitored by search and rescue teams and they regularly check the roads in case someone needs assistance. Other roads in Iceland have regular traffic and locals are quick to stop and offer help in case of a broken down car or an incident.

If you are not entirely sure of where you are and your car breaks down, do not leave your car and start walking along the road. The weather can change suddenly and become foggy or very cold and dangerous.

For emergencies, call 112!

Drive safely and enjoy your stay in Iceland!