Driving in Iceland: Essential Tips, Laws & Road Conditions

Driving in Iceland allows you to see the best of this stunning country with the freedom to go at your own pace. Here are some important things you need to know before your road trip.

Iceland is a volcanic wonderland filled with dramatic landscapes.

While the area surrounding Reykjavik has some great attractions, the only way to see some of the most spectacular, unique and weird geology in Iceland is to drive yourself.

While much of the driving in Iceland is straightforward, there are several challenges that you need to plan ahead for. Weather conditions can be extreme and changeable, road quality is varied, and insurance policies can be confusing.

Furthermore, the type of car you decide to hire, and your own level of adventurousness, will determine where you can go and how much you can see.

We saw a lot of this amazing country on our 10-day Iceland Itinerary, much of which would not be possible without the right car rental.

Read on for all our tips to help you travel independently and experience the best of Iceland.  

At a Glance

Max road speed	90 km/h (paved) / 80 km/h (gravel)
Urban speed limit	50 km/h / 30 km/h near schools
Emergency number	112
Road conditions	road.is
Weather warnings	vedur.is
F-road info hotline	1777 (daily 06:30–22:00)
Minimum rental age	20 (2WD) / 23 (4WD)
Drink drive limit	0.05% BAC
Headlights	On at all times — day & night
F-roads	4WD only — 2WD is illegal & uninsured
Insurance essentials	Check on gravel, sand & ash inclusions
Rural fuel stations	Chip & PIN required — no contactless
Emergency Services	112 Iceland

Should You Drive in Iceland?

Yes. Iceland is a stunningly beautiful country with unusual sights dotted all around the island that you won’t see anywhere else.

While there’s plenty of choice for accommodation in Reykjavik and tours to popular destinations, many of the most unique parts of Iceland are difficult and time-consuming to see via public transport.  

A car rental in Iceland allows you to go where you want when you want and saves you time so you can make the most of your holiday. It not only enables you to see the best of the popular Ring Road, but also to head to breath-taking natural scenery in the remote highlands.

Self-driving in Iceland is the best way to see the country independently with a healthy dose of achievable adventure.

Do I Need an International Driving Licence?

An international driving licence is not required in Iceland, provided you have a valid driving licence from your home country with a licence number, photograph and a valid date. The licence needs to be in Latin letters.

All US driving licences, UK and EU licences are considered valid in Iceland; however, you must have held the licence for at least 1 year.

Drivers must be 20 years of age to rent a car in Iceland and 23 years old to rent a 4-wheel drive. However, some companies now require you to be up to 25 for large SUVs and motorhomes. 

What Are the Roads Like in Iceland?

There are 3 main types of roads in Iceland

Paved Roads // The most famous road in Iceland is the Ring Road (Route 1). Forming a complete loop around the country, it can be driven in about 18 hours, but most travellers take 1 to 2 weeks to explore all the sights scattered along the route. A regular 2-wheel drive vehicle is all you need for the paved roads.

Access Roads // Access roads are minor roads that connect smaller towns and villages to the paved roads. These are generally unpaved, gravel or dirt tracks, but they are usually short, and although often bumpy, they can legally be driven in all types of vehicles. Driving on access roads in summer is no problem; however, in winter, they are cleared less regularly than the paved roads.

F-Roads // The F-roads (fjall, which means mountain in Icelandic) are unpaved gravel tracks that are not regularly maintained and can only be driven in a 4×4. For more information, read our detailed guide to driving the F-roads in Iceland.

How Easy Is Driving in Iceland?

On the Ring Road and other paved roads, driving in Iceland is very easy. The roads are of good quality with clear signs, and generally not very busy. On sunny days, driving is a breeze, but weather conditions can change rapidly, making driving more challenging.

The F-roads are unpaved and, being in more remote, mountainous locations, pose a much greater challenge. To prepare for driving in the highlands, read our guide to the F-roads of Iceland.  

How to Prepare for Iceland’s Driving Conditions  

Iceland is just below the Arctic circle so the conditions can be extreme.

The winters are cold and dark, and even in summer, the sun doesn’t get far over the horizon. You can encounter snow and ice any time of year.

In winter, the storms can be severe, and in summer, the driving rain can be endless. Gusts of wind can easily rip a car door off its hinges – something you’re not insured for.

There are some simple things you can do to prepare.

• Check the weather conditions before each journey.
• Keep up to date with the current state of the roads including which ones are open on the Safe Travel website.
• Take food and drink with you and plenty of warm clothing in case something goes wrong and you get stranded.
• Always park facing into the wind and be very careful as you get in and out of the car.
• If bad conditions are likely, leave yourself plenty of time to complete your journey.

Hiring a Car in Iceland

What Type of Rental Car Do You Need?

The main factor that will determine the type of car you need to hire is where you want to go.

You can find all our favourite destinations on our best places to visit in Iceland guide, as well as tips for putting it together on our Iceland trip planning guide.

However, other factors such as safety, the time of year you are travelling, comfort, cost and trunk size are important as well.

Driving on the Ring Road

If you are visiting Iceland in summer and plan to explore the scenery and towns on the Ring Road, then a 2-wheel drive car is all you will need. You may have a few short, bumpy journeys connecting to access roads, but nothing will be too difficult.

A 2WD is also fine if you are coming in winter and sticking to the populated areas around Reykjavik, where roads are paved and regularly cleared.

Driving in Winter and in the Highlands

If you come to Iceland in winter (November to April) and want to explore outside the populated areas, a 4×4 vehicle is highly recommended.

Ice and snow can quickly settle on the access roads, and are not cleared as quickly as in the towns.

You will also need a 4×4 vehicle if you want to drive into Iceland’s central highlands. To get here, you need to drive on the F-roads, which are only open from around late June to late September.

These gravel tracks come in all shapes and sizes and are an adventure in themselves. You can find all you need to know in our guide to driving the F-roads.

Campervans

Accommodation in Iceland can be expensive and difficult to find, so one money-saving option is to hire your own van to sleep in.

Prices rise dramatically in the high season, but include everything you need for cooking and sleeping in an environment that is much warmer than a tent.

Keep in mind you also need to pay for camping fees each night, and wild camping is illegal in Iceland without landowner permission.

Where to Hire a Car

The best place to book a car rental in Iceland is Lotus Car Rental. This is not an affiliate link, and we were not sponsored by Lotus.

After extensive research, we decided they were the best option, especially if you intend to drive on the F-roads.

Their rental prices include free pickup and drop-off at the airport (5 minutes away), unlimited mileage, free cancellation with no deposit, third-party liability insurance, collision damage waiver, and theft protection.

If you don’t plan on driving on the F-roads, we recommend RentalCars.com, where you can compare prices across all the major car rental companies.

What Insurance Do You Need?

If You Rent from Lotus

Lotus has two levels of additional insurance:

Gold Insurance covers gravel, sand and ash protection, which is recommended in Iceland with its unique volcanic environment.

Platinum Insurance covers all the above, plus it covers vehicles on the F-roads, including river crossings. Very few other car rental companies offer this level of insurance for crossing rivers.

Rentalcars.com

If you book your car with rentalcars.com the quoted price includes theft protection and collision damage with an excess of around Kr 350,000.

However, you can purchase full protection for Kr 13,800 for the entire trip. This means the company you hire the car from will charge you if anything goes wrong. You then need to claim the excess back from rentalcars.com

Insurance4 Carhire

Another good option is to buy an annual insurance policy from insurance4carhire. They have a policy that covers you for the unique challenges of driving in Iceland. All the details are available on their website.

What Type of Insurance Do You Need?

Driving in Iceland risks natural hazards: gravel flying into the windscreen, sand and ash destroying the paintwork, strong wind ripping off doors, and large boulders damaging the underside of the car.

Like most things, renting a car in Iceland is not cheap. But what really pushes the price up is insurance to cover the unique hazards of Iceland. It’s very important to understand what extras are included in your Iceland car rental.

Here are some common considerations:

• Some policies do not cover damage to doors caused by strong winds.
• Crossing rivers above a certain depth may not be covered by your policy.
• Some policies exclude sand and ash protection.
• It’s very common for tyres to be excluded completely from insurance policies.
• Damage to headlights, windscreens, and the underside of the car is generally not covered.

Make sure you know exactly what’s covered to decide if you need any additional insurance. One thing we don’t recommend is theft insurance. Iceland is a very safe country, so theft protection is unlikely to be needed.

For something more enjoyable to read than the fine print of your hire car contract, try these road trip quotes.

New Per-Kilometre Road Tax (2026)

Since 1 January 2026, all vehicles in Iceland have been subject to a per-kilometre road tax.

For passenger cars, the fee is 6.95 ISK per kilometre, which is around 4p (5 cents US) per kilometre.

The rental company will normally handle the charge, but it may appear as a separate line on your invoice or be settled after the trip based on your actual mileage.

Your hire car company may charge you a flat daily rate rather than a per-kilometre fee, but this should be explained up front.

Important Laws to Keep in Mind

Driving in Iceland is a great way to see the country, and on the main roads, like the Ring Road, it doesn’t present too much of a challenge. However, there are a few specific laws to be aware of.

It’s Illegal to Go Off-Road

Driving off-road is not permitted in Iceland. As a remote wilderness area, very few plants manage to survive, and damage to them could take decades to recover from.

Off-road driving has in the past threatened Icelandic fauna, and locals will not hesitate to report anyone driving off-road.  

You Must Keep Your Headlights on at All Times

Low-visibility conditions are common in Iceland, including cloud, mist, rain, and snow. Additionally, driving on gravel and sandy tracks can throw up great plumes of dust, so it’s always necessary to keep your headlights on, day and night. If someone flashes you, it’s probably because you forgot to turn them on.

The Roundabout Rules Are a Bit Different

On 2-lane roundabouts in Iceland, the car in the inner lane has right of way and cars in the outer lane must give way to them. The opposite is true in most other countries, so take care.

You cannot change lanes once inside the roundabout. If you are in the outer lane, you must give way to any inner lane vehicle that is exiting — even if they are crossing your path.

Speed Limits in Iceland

Iceland is a very safe country, and you won’t see many police. But there are frequent speed cameras; some are signed, some are not. The maximum fine for breaking the speed limit is $ 652 USD.

Below are the standard speed limits in Iceland; however, always follow the local speed signs.

• Populated areas: 50 km/h (30 km/h in some residential streets)
• Gravel tracks: 80 km/h
• Paved roads: 90 km/h

Driving Tips

Availability of Fuel

There are enough gas stations along the Ring Road and access roads that getting fuel is not something you need to think about too much.

However, once you venture off the main roads, gas stations become considerably scarcer. Fill up when you can to avoid running out of fuel, and on long journeys in remote areas, plan your next stop.

In particular, many of the F-roads through the centre of the country have no fuel stations at all. Those that do are often few and far between.

There’s also no guarantee that they will be open. Definitely, fill up before you set off on an F-road, monitor your distances & fuel usage, and plan where you intend to fill up next.

Using the Automatic Payment Machines at N1 Stations

All N1 gas stations require you to pay via credit or debit card at the automatic machines located near the pumps. Here’s how to use them:

• Select your language from the screen
• Tap the Lotus discount badge where marked on the machine to activate your discount.
• Insert your debit/credit card and enter your PIN
• Select the amount of fuel you want in Icelandic Krona. Please note – if you want to fill the tank, hit “FULL TANK.” If you hit a krona amount (say, 5000 krona) and you use less than that amount, it will charge you the full amount, then process a refund for the difference in about a week. If you hit FULL TANK, it will only charge you for what you use.
• Select the pump number you are going to use.
• Remove your card and fill up from the pump you selected on the payment machine.
• After you have filled up, put your credit card back in the payment machine to get a receipt.

Note: Lotus Car Rental gives you a discount card offering small savings on fuel at N1 stations.

How to Navigate in Iceland

There are not that many roads in Iceland, so navigation is relatively easy.

Google has extensive coverage of the country, but (even if you have purchased data) reception in less populated areas will be patchy. So make sure you download Google Maps offline for the area you intend to explore before setting off.

We also highly recommend Maps.Me. This app also allows you to download maps for the area, but it offers better offline functionality, more accurate journey-time estimates than Google Maps, and often includes walking routes.

Don’t Stop in the Middle of the Road

Almost all roads in Iceland are only single-lane (except for the ring road), with very little space on the side to pull over.

You’ll be very tempted to pull over and stop for photos, but there are only a limited number of places where this is possible. Stopping in the road slows down traffic and is a danger to other motorists.

Beware of Animals on the Road

Iceland has farms spread all over the country, and instead of fencing their livestock in, they are free to wander wherever they want.

As a result, sheep, cows, and highland horses can be found meandering all around the country. So keep an eye out for any animals that might be on the road.

Important Resources

The emergency number in Iceland is 112. This number responds to all emergencies, including accidents, fires, crimes, natural disasters, and search-and-rescue operations.

• Safetravel.is – Provides a live update of the road conditions.
• Vedur.is -The Iceland Met Office with the most reliable forecast.
• Safe Travel App to submit a travel plan outlining where you will be each day.
• 112 Iceland – Contact the emergency services without calling.

Take Extra Care on the F-Roads

There are no facilities and little road traffic on the F-roads, so if something goes wrong, you could be on your own for quite a while.

Ideally, travel in pairs and download the Safe Travel App to submit a travel plan outlining where you will be each day. The app allows you to communicate with the emergency services, even if you have no phone coverage, so they can find you quickly should anything go wrong.

Book Your Car Hire Well in Advance (Especially in Summer)

Around 2 million visitors flood into Iceland every year, and the vast majority come during the short summer season. So book your car rental well in advance. If you intend to travel in the highlands, you’ll need a special car, which the rental company may have a limited supply of.

More Iceland Planning Guides

• Working out what to see? Here are our top places to visit in Iceland.
• Where to stay to see the Northern Lights in Iceland.
• All you need to know to plan your next Iceland trip.
• We have 6 epic Iceland itineraries to help you plan your trip.
• Looking for accommodation? Here’s where to stay in Iceland.
• All you need to know about driving in Iceland.
• Explore the stunning Iceland highlands and get off the tourist trail.
• Want to increase your excitement? Consider driving the F-roads.
• If you only visit the highlands once, use this guide to Landmannalaugar.
• Or follow this guide to Thórsmörk and hike the Valley of the Gods.