Driving your own car allows you to hunt for the Northern Lights whenever the sun has set!

Driving in Iceland: The Ultimate Guide to Road Trips

Verified Expert

A road twists through the mist in East Iceland.

Learn everything you want to know about driving in Iceland. Find out why driving in Iceland is easy in the summer and more difficult in winter. Learn how you rent a vehicle for your self-drive trip and what the requirements are. Find out which side of the road do they drive on in Iceland, what the road conditions are like, how to find parking, driving rules, and more in this complete guide. 

Iceland's spectacular attractions, such as its glaciers, volcanoes, and hot springs, can be found in beautiful pockets all over the country. They fill every corner with color and possibility.

Whereas it's OK to walk or cycle within the capital, Reykjavik, the best way to get out of the city and explore these incredible places is undoubtedly on road trips and self-drive tours. Go here to find Iceland's largest selection and cheapest car rental prices.

A self-driving Iceland trip, especially with a four-wheel-drive vehicle, allows you to tailor a unique holiday in this incredible country.

You'll be able to hunt for the northern lights in winter at your convenience, and in summer, you can reach the remote Highlands locations. And throughout the year, you'll be able to take the Ring Road around the country and spend as long as you'd like at each attraction.

While some destinations, such as the Westman Islands, require you to find a passage by ferry or plane, this article will focus on everything you need to know about driving in Iceland.

Do I Need a Car in Iceland?

The aurora borealis swirling above a snowy road in Iceland.

Whether or not you need a car depends on what you're expecting from your holiday. Self-driving tours are popular, and when it comes to a road trip around Iceland, there's no better option than driving the Ring Road. 

If you yearn for freedom and flexibility and want to immerse yourself as much as possible in nature, driving yourself around Iceland is highly recommended. There are several alternative ways of enjoying the country, however.

Bus passports, available in the summer, allow travelers to reach some of the island's most remote spots without renting cars. They're provided by licensed coach companies and either apply for the completion of a predetermined route or for a certain number of days.



 

Utilizing the bus passport is a convenient means of travel if you are planning on spending a significant amount of time at each of your chosen locations.

They're recommended for those looking to hike longer trails, for instance.

A map revealing certain bus routes around Iceland.

The local bus transport system, Straeto, runs all year long to selected towns. Usually, the only interruptions to the regular schedule occur when the weather is truly terrible.

Still, one should not rely on the local public transport to get you far from urban areas. There aren't many bus routes in the country, and they run infrequently (some just a few days of a week). They're also surprisingly pricey.

Taxis are costly, and drivers will often be unwilling to take you far from the city limits. Unfortunately, there's no Uber in Iceland, either.

Of course, you also have the option of staying in the capital and going out on guided tours. Guided tours range from sightseeing to action-packed activities like scuba diving and glacier hiking. It's also possible to book vacation packages around Iceland, which take all the stress of planning an immersive holiday off your shoulders.

Hitchhiking is safe (and common) although not very dependable and impractical for a company of people or for those with a lot of luggage. Hitchhiking is also ill-advised outside of the summer months due to the ever-changing weather conditions.

Renting a Car in Iceland

There are a wide range of different vehicle types to choose from when renting a car in Iceland.

There are several car rentals in Iceland offering a variety of vehicles from which to choose.

Renting a four-wheel drive - an SUV or mini truck, such as a Subaru or Toyota - is popular outside city limits because they hold plenty of luggage and are capable of managing most terrain you'll encounter.

Alternatively, the cheaper four- or five-seat Yaris is popular within city limits and on paved roads. However, they're notably smaller and don't contain much space for luggage.

Please note that you'll need a four-wheel drive if you plan to drive any Highland roads (marked as F-Roads). It's also highly recommended to book a four-wheel drive if you are driving in Iceland in winter.

The Highlands of Iceland can only be reached in a four-wheel-drive.

Those renting a car in Iceland should familiarize themselves with the Ring Road encircling the island. This road is accessible and easily traversed in any vehicle; it's the main road that will connect you to Iceland's many attractions.

For the entirety of the road, there's only one lane going each way, and you'll find very little traffic. In rural Iceland, traffic jams are rare. To see updated information about which roads are open and their condition at any given time, visit the Icelandic Road and Coastal Administration (IRCA) or call the number 1777 for information in English.

Be aware that any off-road driving in Iceland is illegal. Off-road driving damages the delicate natural environment and is punishable by high fines. Driving on Highland tracks is not considered to be driving off-road and is not punishable by fines. You are only committing a grave offense if you leave the track and drive out into the unspoiled nature.

Not only is driving off-road seriously dangerous for drivers' safety, but it also damages Iceland's pristine nature. So, please respect the rules and Icelandic nature when driving in Iceland.

Flexibility in Booking an Iceland Car Rental

When renting a car in Iceland, you can arrange to pick it up at the airport or in Reykjavík.

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 an excellent rental company, flexibility is seldom an issue.

Usually, you can pick your car up at Keflavik International Airport, a 31-mile (50-kilometer) drive from Reykjavik, and drop it off there for a small extra fee.

If you are unsure of the length of time you wish to rent your car in Iceland, ask the car company about their flexibility when deciding which company to use.

It's advisable to book in advance, especially for the summer season if you want a specific car. However, it's worth noting that you'll very likely be able to rent a car in Iceland with just a day's or a few days' notice.

Parking in Iceland

There is parking under Harpa in Reykjavík, but it is expensive.

Parking spaces in most parts of the country are free of charge except in central Reykjavik, central Akureyri, and Seljalandsfoss waterfall.

However, stopping or parking your car temporarily on the side of a road in the countryside is highly discouraged as it can be perilous, particularly in icy or wet conditions. 

If you feel the need to stop, make sure that you find somewhere off the main roads,  and make sure your car is visible from all angles and not interrupting any traffic.



If it's dark outside, foggy, or for some other reason bad visibility, then make sure you put your hazard lights on to enable other drivers to see you easily. Also, do not walk too far from your car if visibility is poor for your own and others' safety.

Parking in Reykjavik: Zones and Prices

There are only four parking zones in Reykjavik, mainly located around the downtown area. The way to know which zone you are in is to look at the P-signs on lampposts around the city; the meters and ticket machines also display the zone.

The basic rule of paid parking in Reykjavik is that the closer you are to Laugavegur (the main shopping street), the higher the price.

Parking map of downtown Reykjavík.

Red zone: 

  • About 2.46 USD per hour.
  • Monday to Friday 9 a.m. to 6 p.m., Saturday 10 a.m. to 4 p.m. 
  • Free on Sundays.

Blue zone:

  • About 1.31 USD per hour.
  • Monday to Friday 9 a.m. to 6 p.m., Saturday 10 a.m. to 4 p.m.
  • Free on Sundays.

Green zone: 

  • About 1.30 USD for the first and second hour, 0.38 USD per subsequent hour.
  • Monday to Friday 9 a.m. to 6 p.m., Saturday 10 a.m. to 4 p.m.
  • Free on Sundays.

Orange zone:

  • About 1.30 USD per hour.
  • Monday to Friday 8 a.m. to 4 p.m.
  • Free on Saturdays and Sundays.

Additionally, six parking garages in central Reykjavik permit temporary parking. They're open daily from 7 a.m. to midnight.

These garages are Stjornuport and Vitatorg (0.61 USD the first hour, then 0.38 USD hourly); and Kolaport, Vesturgata, City Hall, and Tradarkot (1.53 USD the first hour, then 0.92 USD hourly).

Find updated availability for Reykjavik's parking garages here.

Additional parking is available underneath Harpa Concert and Conference Hall at 1.92 USD for an hour or 13.85 USD for eight hours.

Hazards When Driving in Iceland

Below are some of the most common causes of road accidents and car damage when driving Iceland. By familiarizing yourself with them, you'll reduce the chance of being involved in an accident.



  • Under-inflated or damaged tires: Iceland's road surfaces differ significantly. In rural areas, many are gravel or else littered with potholes. Therefore, your tires must be in good condition every time you go out. Flat tires are not covered by insurance.
  • Slipping on ice: Iceland's winters bring freezing temperatures across the country, meaning drivers must be extra vigilant when behind the wheel. Even in summer, many mountain passes can be veiled in ice. If you know that you may be driving in such conditions, ensure you book a four-wheel drive.
  • Sheep are crossing the road: The hundreds of thousands of sheep that call Iceland home roam free in summer, and they're known for running out into the roads when panicked. Not only would you have a sheep's death on your conscience if you hit one, but you may be liable to both your rental company and the sheep's owner.
  • Doors caught in the wind: The strong winds in Iceland can cause damage even to a parked car. In stormy weather, open your doors slowly and with a firm grip, lest a gust rips it from its hinges.
  • Losing traction on gravel roads: Many of Iceland's more remote locations are only accessible by driving on gravel. Note that you should approach the point of the road when tarmac becomes gravel slowly and without breaking and keep a lower speed on this type of road surface.
  • Driving in snowstorms: Snowstorms in Iceland can reduce your visibility to mere feet. If one has been forecast, it's highly recommended you do not attempt any driving that day. While snowplows will try to maintain a clear passage and bright yellow markers line many of the roads, it's incredibly easy to get stuck in the snow or cause a crash. Always check the weather before doing any winter driving in Iceland.
  • Speeding: With the ice as mentioned above, gravel, and unpredictable weather, it should come as no surprise that you should travel within speed limits and lower your speed accordingly should conditions become adverse.

Is It Easy To Drive in Iceland?

Driving in Iceland is a wonderful experience and is the top way to navigate the island entirely. Whether you're looking at renting a car and creating your journey or following a self-drive tour, you'll always find adventure exploring our shores.

If you don't have experience driving in ice, snow, and strong winds, it can sometimes be a little daunting for first-time visitors when encountering these conditions, particularly in winter.

For those wondering how to drive in Iceland, the best advice – other than to respect Iceland's driving rules, obviously – is to stick to a safe driving speed. Be sure to give yourself enough space from other vehicles and don't rush your journey.

Part of the adventure of a road trip in Iceland is to fully explore the terrain and take in the sights and stops at your leisure. Rushing yourself and driving too fast frequently results in accidents, so please avoid doing so.

Sunset in Reykjavik by Hallgrimskirkja

Iceland roads and their conditions vary dramatically based on the location. For example, Reykjavik's roads are usually very well maintained, just as you'd expect in a small city. But you'll encounter some worn parts of the road as a result of years of weathering.

In the countryside, the routes are usually two-lane roads. The most used road is Route 1, which circumnavigates the whole island, hence its other name, the Ring Road.



You'll likely encounter much rougher terrains when venturing off the Ring Road. These often include gravel roads and deep potholes due to less-frequent road maintenance.

A road driving through Landmannalaugar

If you've decided to rent a four-wheel drive, you can always drive into the Highlands. It's much better to do this in the summer season for less volatile weather and more light when you're driving.

Please note, driving in the Highlands is incredibly different from navigating other roads in Iceland; the terrain is much rougher, and you'll frequently have to cross rivers on your journey. If you don't have experience and confidence driving in these types of conditions, it may be preferable to take a highlands tour from a provider rather than go yourself.

Frequently Asked Questions

You don't need a car to see all of Iceland's attractions; a city bus will take you to the beautiful lighthouse and nature reserve at Seltjarnarnes just by Reykjavík.

To alleviate any concerns you might have about driving in Iceland, we have included a thorough FAQ to answer the most commonly asked questions and cover a few basic Iceland driving rules. If any questions you might have about driving around Iceland have been missed here, please make sure to include them in the comments below. We will be sure to answer your questions as soon as possible.  

How old do you need to be to rent a car in Iceland?

The minimum age to rent a passenger car in Iceland is 20 years old for insurance and safety reasons.

The minimum age to rent a four-wheel drive or a minibus is 23 years old, as these vehicles require further experience and 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 when renting a car in Iceland?

To rent a car in Iceland, you'll need a credit card, a driver's license in English (or with an official translation), and more than one year of driving experience. Note that the individual who reserves the car does not need to be the intended driver. When you sign the rental contract, you'll be asked to display your credit card and driver's license.

Renting a four-wheel-drive will allow you to get off the beaten track in Iceland.

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 airport arrivals 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 or the name of the rental company, you may need to take an airport shuttle to the rental offices near the airport. First, however, you should try phoning the company with which you made the booking.

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 if you 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 clarify any outstanding issues. 

At the end of the trip, you'll have to return the car, obviously. 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 Reykjavik 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.

If you've agreed with your car rental company to leave the keys with a member of your hotel's reception, be sure you let 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'll leave the vehicle 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.

Gullfoss waterfall is one of the three sites that can be driven to on the Golden Circle.

What car insurance should I get?

CDW (Collision Damage Waiver) is often included in the car rental price, and many companies offer optional insurances such as SCDW, GP, TP, SAAP/SADW, and Premium Insurance. It's advised that you add gravel protection if it's available, especially if you are planning on driving the south coast of Iceland or accessing the central Highlands. 

It's essential to know that all the insurance packages are based on self-risk/self-liability. In case of an accident, you are responsible for up to X amount of damage, which is outlined in the CDW/SCDW section of the rental agreement.

Customers arriving from North America often wish to decline CDW as it's covered by their credit card insurance. When making the booking, it's best to check if this is an option, as it's not often possible to remove CDW from an existing reservation.

Usually, CDW liability is around 2,694 USD, 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.

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. Towing costs usually start at about 423 USD.

CDW/SCDW does not cover damage to the tires and undercarriage. A few companies protect the tires, but this is rare.

In winter, all cars are equipped with winter tires as required by law. However, studded tires are optional. You can request studded tires, and most car rental companies will try to accommodate you based on availability. It's not possible to request chains on any vehicles in Iceland.

F-roads are treacherous to drive, and large rocks can cause damage to the undercarriage of the car, which is never insured. Crossing rivers can lead to significant water damage, which again is not covered. Customers proceed at their own risk, and we advise all our visitors to avoid crossing rivers in any vehicle.

Many insurance packages do not cover "animal damage." Be careful of sheep on the sides of the roads when driving around Iceland.

Watch out for sheep when driving in Iceland

Make sure you reduce your speed when encountering sheep, and beep your horn to help incentivize the sheep to move. Horses are also quite fond of gnawing on cars, so be careful where you park.

Finally, if you're camping, especially in the summertime, be careful not to leave your car open for long periods as mice may hop in for shelter.

What's the speed limit when driving in Iceland?

Standard speed limits in Iceland are as follows:

  • 31 mph (50 km/h) within cities
  • 49 mph (80 km/h) on dirt and gravel roads
  • 55 mph (90 km/h) on paved country roads

While you may not often see police cars on the roads, active speed cameras are hidden in many locations. Some of these speed cameras correspond with a sign around 328 feet (100 meters) away informing you of their presence, and others are positioned to catch you by surprise.

If you are caught driving over the speed limit, you'll likely receive a hefty fine and may even be pulled over by the police at the side of the road.

Kirkjufell mountain is just a few hours away from Reykjavík to those who are driving in Iceland.

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 center into the road.

If this is necessary, make sure to drive very slowly. Also, ensure that you keep your eye out constantly for oncoming headlights, making sure to create sufficient space to allow other vehicles to pass you safely.

How much does gas cost in Iceland?

The price of gas (95 octanes) is around 1.87 USD per liter. Diesel is only marginally cheaper, with prices around 1.82 USD per liter. The costs fluctuate somewhat.

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 car rental costs vary from about 38 USD to 154 USD per day, while SUVs vary from 58 USD to 346 USD per day. Significant discounts apply for longer rentals, and prices are about twice as high in the summer compared to the winter.

It's advised that you reserve your car rental early, as it can sometimes be hard to find rentals during the high season.

Are there any laws I need to know when driving in Iceland?

Everyone must wear seat belts in all cars and buses in Iceland. It's also mandatory for children to sit in the appropriate car seats suitable for their age.

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

Are there many roundabouts, one-way streets, or complex junctions?

Iceland's roads are generally only one or two lanes. However, there are several one-way streets in the center of Reykjavik and the west part of town. This means it can often be frustrating to navigate a car when driving in Reykjavik for the first time.

In the countryside, you may encounter some single-lane bridges or single-lane tunnels. The etiquette is to always allow the vehicle closest to the crossing to go first. If there's any hesitation, you can flash your headlights at the oncoming cars to signal that they have the priority for crossing.

Before you enter, there will be a sign showing the right of way. Drive slowly so that you can stop the car on slippery roads if necessary.

There are a few roundabouts in Iceland, mostly when entering Reykjavik or near larger towns. Make sure you note that the inside lane always has the right of way. You only need to indicate when leaving the roundabout, not when entering it. Use the inside lane if you plan to exit the roundabout on the second, third or fourth exit. Use the outside lane if you plan to depart the roundabout on the first exit.

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 leave. Make sure you then change the indicator to the direction of your exit. You can never switch lanes after you have entered a roundabout, and there are never more than two lanes in roundabouts in Iceland.

There aren't many complex junctions, only a couple of underpasses and overpasses within Reykjavik.

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

The emergency number in Iceland is 112.

Contact your rental car office for information if your car breaks down or has a flat tire.

There's no official road assistance in Iceland, but you can contact the Icelandic Association for Search and Rescue for information about the nearest help center or car repair company. Roads in the Highlands are monitored by search and rescue teams, and they regularly check them 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 unsure 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. Stay in place and wait for a passing motorist.

What reputation do Icelanders have regarding driving?

Most Icelanders are capable behind the wheel because the icy, wet, and regularly dark conditions make the consequences of recklessness very real.

Icelanders do, however, sometimes have a reputation for driving with a one-track mind. For example, Icelandic drivers frequently won't pull over to the outside lane when other traffic joins a two-lane road from an entry ramp. It's best to ensure you stay vigilant, drive within the speed limit and stay aware of all other drivers around you to avoid any potential accidents.

Also, be aware that you'll be sharing the road with travelers from around the world, and some of them may only be used to city driving or driving in clear conditions. When driving in Iceland, always ensure you drive in a way that respects all other road users.

Driving your own car allows you to hunt for the Northern Lights whenever the sun has set!

We hope you have a wonderful experience should you choose to drive around Iceland. It gives you the flexibility to explore this wonderful country on your terms and make the most of your trip. Ensure you stay safe and always follow Iceland's driving rules to avoid issues. Don't forget to comment below about your questions and experiences driving in Iceland!