The Ultimate Guide To Driving in Iceland: Everything You Need To Know

Woman standing with back to the camera in Iceland.

Iceland, the land of fire and ice, is a dream road trip destination for many travelers. Located in frigid waters of the North Atlantic, this Nordic outpost is where jagged glaciers collide with volcanic fury and the dancing Aurora Borealis.

What to Know About Driving in Iceland 

SUV, Iceland, rent a car. Car in Iceland.
Image Credit: Portia Jones.

As public transport is limited in Iceland, renting a car lets you easily explore moss-covered lava fields and see the towering mountains, boiling geysers, and bubbling mud pools. Get ready for a road trip around Iceland's otherworldly landscapes and untamed beauty with this guide to driving in Iceland! 

Why Drive in Iceland?

Road north trip by car
Image Credit: Sveta Y/Shutterstock.

While there are guided tours available, a self-driving tour of Iceland allows you the flexibility to spend as much time as you want at each destination. Fancy an extended stop at a thundering waterfall or a spontaneous detour to a lava field? It's entirely up to you when you're in the driver's seat — you're the master of your road trip destiny! You can explore this Nordic paradise and your own pace with a banging road trip playlist and plenty of snacks. 

Taking a road trip around Iceland allows you to discover off-the-beaten-path locations. While popular attractions like the Golden Circle and the Blue Lagoon are worth visiting, there's something magical about finding a secluded hot spring or a hidden hiking trail that isn't swarming with tourists. Plus, you'll get better snaps for your socials. 

Navigating through Iceland's diverse terrains is also an adventure. One minute you could be cruising along a winding highway with expansive ocean views, and the next, navigating a rugged mountain pass surrounded by snow-capped peaks. This dynamic driving experience makes the journey just as exciting as the destination.

Car Rental in Iceland: Choosing The Right Vehicle

Land Rover SUV 4W driving in Iceland off-road
Image Credit: Portia Jones.

Choosing the right vehicle for your Iceland road trip is one of your most important decisions. The type of rental car you choose will largely depend on where in Iceland you're visiting.

If you plan on visiting Reykjavik and sticking to the well-maintained Route One, a standard 2WD or electric car is your best option. Reliable and budget-friendly rental options include the Kia Picanto, Volkswagen Polo, Kia Rio, Toyota CH-R, and Toyota Yaris4. For a little more comfort and better handling on rough Icelandic terrain (without going off-road), consider a 2WD SUV5.

If you visit the remote Icelandic highlands or head to the wilds of the north, you'll need to rent a 4×4 vehicle. These hardy vehicles are well-equipped to handle multiple types of Icelandic terrain, making them perfect for Icelandic F-roads and rugged river crossings. 

How to Rent a Car in Iceland

Woman standing in front of a car in Iceland.
Image Credit: Portia Jones.

For pick-up, most car rental services offer collections from Keflavík Airport, and you can also book self-drive holiday packages through travel companies like Discover the World, which can help you organize car rentals. 

If you plan a DIY trip to Iceland, you can fly directly to Reykjavik with airlines like PLAY, which have US and UK routes to Iceland. 

You can then rent a car with an airport collection from companies like Europcar, Avis, Hertz, and Budget.

How Much Does It Cost to Rent a Car in Iceland?

The cost of renting a car in Iceland can vary depending on several factors, including the time of year, the type of vehicle, the rental duration, and the rental company. On average, the daily rental rate for a two-wheel-drive car starts at around $77 to $109 per day. 

However, prices tend to be higher during the peak tourist season, from June to August, when the weather is mild and daylight lasts longer. The winter season offers lower prices due to Iceland's harsher conditions and reduced daylight hours. You'll likely need a four-wheel drive for this time of year, and daily hire prices are approximately $160. 

If you want a greener road trip, hiring an e-car in Iceland costs around $55 per day, depending on your chosen model and optional extras — including insurance and breakdown cover.

What You Need to Rent a Car in Iceland

  • The minimum age to hire a car in Iceland is 20 though some newer e-car models (such as the Tesla Model Y) have a minimum hirer age of 23.
  • You need a valid driving license and a secondary ID or passport.
  • Most car rental companies will require you to have a credit card for a deposit.
  • Ensure you get car hire excess insurance before your trip in case of any bumps or accidents.

Best Time To Drive in Iceland

Driving in falling snow on gravel road in Iceland. Focus on the outside snowy landscape and flakes, dashboard defocused
Image Credit: Peter Gudella/Shutterstock.

The best time to drive in Iceland largely depends on what you're looking for on your trip.

Summer is the most popular season for driving in Iceland and for good reason. With extended daylight hours and milder temperatures, conditions are also safer for a road trip. During this time, the roads are open and clear of ice and snow – making driving safer and more accessible.

Many remote highland roads and untamed interior areas are open during summer, allowing you to access some of the country's wild locations. The high season of June, July, and August brings lush landscapes, the famed midnight sun, and endless daylight. 

Winter Driving Conditions in Iceland 

Winter in Iceland, by contrast, is a challenging and unpredictable time to drive. Conditions can be harsh, with icy roads and snowstorms making road conditions vary massively depending on season and location. Being well-prepared, driving cautiously, and regularly checking the weather and road conditions are essential. 

But the risk allows you to explore frozen landscapes, icy waterfalls, and snow-covered trails. This season is ideal for witnessing the dancing Northern Lights and getting some captivating photographs.

However, winter driving conditions can be harsh, with icy roads and snowstorms. It's essential to be well-prepared, drive cautiously, and regularly check the weather and road conditions. A valuable tool for an Iceland road trip is the Safe Travel conditions map with real-time updates on road closures, wind speed, traffic situations, and webcams so you can stay safe on your driving adventure. 

Iceland's Driving Laws

Iceland travel nature landscape during sunset. Asphalt road blooming lupine flowers and majestic mountains on background. Travel on car is a Lifestyle, adventure concept.
Image Credit: Yevhenii Chulovskyi/Shutterstock.

Understanding the driving laws in Iceland is vital to ensure a safe and hassle-free road trip. The most important thing to know is that traffic in Iceland drives on the right side of the road, similar to many parts of Europe and the USA. This means you should always keep to the right side of the road unless overtaking. 

Speed limits in Iceland vary depending on the type of road, but generally, the maximum speed limit you'll come across is 90 km/hr on paved roads. Sticking to these limits is essential as Icelandic police are hot on enforcing speed regulations. Fines are also hefty and range from $200 to $700, so slow down! 

Another essential driving rule in Iceland is that off-road driving is illegal in Iceland. Stick to the marked roads and tracks to protect the fragile Icelandic nature and avoid hefty fines. You do not need a wildflower selfie that bad.  

Drinking and driving should be avoided in Iceland. The maximum permitted level of alcohol in the driver's blood is 0.05 percent –– significantly lower than in many other countries.

Road Signs in Iceland

Route 1 or Ring Road (Hringvegur) national road that runs around the island and connecs popular tourist attractions in Iceland, Scandinavia. Focus on 90 kph speed limit and priority road signs.
Image Credit: Dmitry Naumov/Shutterstock.

Navigating Iceland's unique landscapes can be a fun driving experience, but it's essential to understand road signs to stay safe. Icelandic road signs come in various colors and shapes, each carrying a specific message for drivers. Speed signs, for instance, will be yellow circles bordered with red. Stick to the legal speed limits to avoid hefty fines. 

Triangle-shaped signs are warnings in Iceland. Generally, these are yellow with a red border, featuring a black symbol indicating the potential hazard. A common warning sign is to watch for animals that live near the road. 

If you're planning on driving to more remote areas, some signs are unique to Iceland's terrain, like those indicating unbridged rivers, closed roads, and gravel roads. Understanding these signs is essential when venturing into the wilder areas of the island. Use the handy SafeTravel Iceland App to learn more about Iceland's road signs and driving conditions. 

Vehicle Breakdowns and Accidents in Iceland

Beautiful and dangerous driving road in winter snow Iceland
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Safety should be your top priority if you have a bump or a breakdown while driving in Iceland. If possible, move your vehicle to the side of the road to avoid obstructing traffic and put your hazards on. 

If anyone is injured, call 112 ­– the equivalent of 911 in the US – to be connected to police, fire, or other emergency services. If the accident damages your vehicle, but no one is hurt, you should still notify the authorities and the car rental company as soon as possible. They can guide you with arranging a replacement car or towing and breakdown service. Broken down in Iceland? You can call your car rental company to find out how to recover your vehicle. 

Iceland's Road System

Road trip in Iceland. Icelandic landscape during a car trip to Westfjords region.
Image Credit: Marti Bug Catcher/Shutterstock.

Iceland's extensive and well-maintained road system makes it an ideal destination. If you're looking for an easy and scenic drive, The Ring Road, also known as “Route 1,” is mainly paved and accessible year-round, making it a straightforward and accessible road trip. Very popular with tourists, the road covers approximately 1,332km and connects most of Iceland's major towns, natural wonders, and attractions. 

Beyond the Ring Road, Iceland's interior has an extensive gravel and dirt road network, often called “F-roads.” These rugged highland routes lead to the country's most remote and scenic destinations. But you'll need to drive them in a 4×4 vehicle due to their challenging terrain and icy river crossings. 

You'll need to check the road conditions and obtain updated information before driving on F-roads, especially in the winter when some routes may be closed or impassable.

Must-Visit Destinations on Your Iceland Road Trip

Rocky beach south Iceland. Woman sitting in the sun.
Image Credit: Portia Jones.

From popular routes like the Golden Circle to the epic Ring Road, this Nordic Island has incredible landscapes, rich culture, and unparalleled adventure to discover.

Here are some of the popular routes you should explore.

Golden Circle

The Golden Circle is the most famous route in Iceland. This 300km loop takes you through some of the country's most renowned landmarks. Start at Thingvellir National Park, a UNESCO World Heritage site where you can explore the rift valley that marks the crest of the Mid-Atlantic Ridge. 

Then marvel power of Geysir and Strokkur, geothermal hotspots known for their impressive eruptions. End your day at Gullfoss, the ‘Golden Waterfall,' whose thunderous cascades are fantastic sights. 

Ring Road

No road trip in Iceland is complete without driving the famous Ring Road, also known as Route 1. This 1,332km loop circles the entire country, connecting major towns and showcasing an array of natural wonders and attractions. Starting and ending in Reykjavik, the Ring Road perfectly balances Iceland's unique landscapes.

Key Iceland destinations along this route include Jokulsarlon Glacier Lagoon, with its floating icebergs; the black sand beach of Reynisfjara; and Dettifoss, one of the most powerful waterfalls in Europe.


Seeking lesser-known Icelandic gems? Venture off the beaten path to the Westfjords. This remote region is characterized by dramatic fjords, rugged cliffs, and quaint fishing villages. 

Make sure to visit Dynjandi, a series of waterfalls cascading down a mountain, or dip in one of the many bubbling, natural hot springs scattered throughout the area.

Snaefellsnes Peninsula

Dubbed ‘Iceland in miniature,' the Snaefellsnes Peninsula encapsulates Iceland's geological wonders within a relatively small area. 

Highlights include the Kirkjufell Mountain, the subject of numerous landscape photographs, and the Snaefellsjokull National Park, home to a glacier-capped volcano that inspired Jules Verne's Journey to the Center of the Earth.

Diamond Circle

The Diamond Circle in northern Iceland is a lesser-known but equally captivating road trip route, offering remote landscapes and powerful waterfalls. Starting from the town of Akureyri, the “Capital of the North,” drive eastward to reach the geothermal area of Húsavík. 

This picturesque town is known as the whale-watching capital of Iceland, where you can take a boat tour to observe wave-breaking tail flicks and ocean acrobatics from humpbacks, minkes, and playful white-beaked dolphins. 

South Coast

In South Iceland, you'll find some of Iceland's most impressive natural sights, including national parks, ice caves, glacier lagoons, and powerful waterfalls. As you drive along this strip of scenic coast, you can see endless dried lava fields, rugged cliffsides, and Icelandic fishing villages.

Highlights here include the waterfalls of Skogafoss and Seljalandsfoss and the world-famous black sand Reynisfjara beach. This is one of the most photographed spots in Iceland and is located near the charming village of Vik. Its allure is not just its black sands from volcanic ash; the sea stacks and surreal basalt column formations set it apart from other beaches in Iceland.  

Iceland Road Trip Essentials

Woman standing with camera against summer Iceland landscape.
Image Credit: Portia Jones.
  • Driver's license
  • Travel insurance for medical coverage and trip protection
  • Local SIM card or portable Wi-Fi device for staying connected
  • Pre-download offline maps and navigation apps 
  • Parka app for parking
  • Cash for entrance fees to national parks and attractions
  • Reusable bags for collecting trash and respecting the “Leave No Trace” principle
  • Portable phone charger and travel adapter for Icelandic outlets (Type C/F)

Learn more about road-tripping in Iceland on the Travel Goals Podcast.

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