Driving in Iceland

LICENCE	REQUIREMENTS
US / American licence	All US driving licences are valid
UK / British licence	All UK driving licences are valid. Please note: in Iceland, motorists drive on the right-hand side
Canadian licence	All Canadian driving licences are valid
European / EU / EEA licence	All EU/EEA driving licences are valid
Australian licence	All Australian driving licences are valid. Please note: in Iceland, motorists drive on the right-hand side
Malaysian licence	All Malaysian driving licences are valid
Chinese licence	All Chinese driving licences are valid
Indian licence	All Indian driving licences are valid. Please note: in Iceland, motorists drive on the right-hand side

Your rental car

It is important that you are well-informed about your car rental agreement and vehicle insurance – please read the waiver carefully and ask the rental agent about anything unclear before embarking on your journey.

Your rental car should be in good condition when you receive it. Make sure to check all lights, tyres and the spare tyre. Also be sure to test the radio before driving out of the car park. If you have any doubts about the car’s functionality, please contact your rental agent directly.

Repairs or breakdowns

If any problems arise, including a flat tyre, contact the car rental agent for assistance right away. They will be able to arrange roadside assistance for you. And please be aware that we operate a 24/7 helpline if you need support, so don’t hesitate to get in touch with us. 

In case of smaller problems, like if your windscreen wipers stop working (possibly from insects or dirt), you can stop at a petrol station and ask the service staff to clean them or assist you.

The “Ring Road”

The Ring Road is the nickname for Route 1, the country’s only highway that circles the entire island (except for the Westfjords). As the interior highlands are mostly impassable, the Ring Road stays close to the coastline for its entire 1,328 km (825 mile) span. Most of Iceland’s most popular attractions are near or just a short detour from this highway.

For more information, read our guide to driving around Iceland.

Driving laws: quick facts

• In Iceland, motorists drive on the right-hand side of the road 
• Motorists are obliged to use headlights at all times
• All passengers must wear seat belts
• Talking on mobile phones while driving (except with headsets) is prohibited
• Driving under the influence of alcohol is punished with hefty fines, starting at 70,000 ISK

Speed limits and fines

Fines for speeding are high, ranging from 30,000 ISK to 150,000 ISK. The general speed limits are as follows:

• 50 km/h or less in urban/residential areas
• 80 km/h on gravel roads (we recommend slower speeds)
• 90 km/h on paved roads like the major highway, Route 1.

Please note that speed cameras are posted around the country – particularly in urban areas and in the Hvalfjörður tunnel.

Rural road hazards

Many bridges in rural areas – even on the Ring Road – are only wide enough for one car at a time. The car closest to the bridge gets the right of way for crossing these single-lane bridges (Einbreið brú).

Also, proceed with extra caution when approaching a blind hill (Blindhæð) or when the paved section of a road ends and transitions to gravel (Malbik endar).

Be sure to familiarise yourself with road signs.

Sheep 

Sheep actually outnumber people in Iceland! As such, please drive carefully through farmland as free-roaming sheep are frequently spotted near roadsides and often wander onto the roads. If you notice sheep near the road, slow down, and if they are on the road, honk the horn.

Road tunnels

You may encounter one-lane tunnels in remote, mountainous areas of Iceland. When driving through these tunnels, you might need to pull into the passing places (turnouts) at certain intervals to allow oncoming traffic to pass.

But how do you know who has the right of way? If the passing places are on your side (on the right) in the tunnel, you are obligated to pull over for oncoming cars. The length of the tunnels, in kilometres, is indicated by signs at tunnel entrances.

Highland roads (F-roads)

Most highland roads (or mountain roads), marked with an “F” on maps, have loose gravel surfaces, so please drive with extra caution and pay special attention along the shoulders of the road. You must reduce your speed – especially with oncoming traffic – since these roads tend to be very narrow and often have very sharp winding turns.

Most highland roads are closed until the end of June or longer due to wet, muddy conditions that make the roads impassable. When opened, most of these roads are only suitable for 4WD vehicles.

Important note: Driving a regular-type rental car on prohibited highland roads can invalidate your rental insurance – make sure to review the rules in your car rental contract. Some car rental agencies require extra insurance for travelling in the highlands.

Off-road driving

Driving off marked roads can damage fragile vegetation and be very dangerous for motorists. Therefore, off-road driving is strictly prohibited and heavily fined by authorities.

Petrol/gas stations

Fuel is slightly cheaper at self-service stations such as ÓB, Orkan and Atlantsolía. They only accept credit cards with a 4-digit PIN number. You can also purchase a pre-paid fuel card from the service centre, if there is one.

N1 is a chain of petrol stations with 98 locations throughout the country. Their locations typically also have kiosks selling food, beverages and other goods.

Self-service pumps are marked ‘sjálfsafgreiðsla’ and full-service pumps are marked ‘full þjónusta’. Make sure to check which type of fuel your car requires (it is usually marked on the fuel cap) before filling the tank.

Opening hours vary throughout the country, but most petrol stations in Reykjavík area are open between 7:00 and 23:00. Typically, the larger stations, like N1, will remain open for self-service after closing hours and accept credit cards with 4-digit PIN numbers.

Important note: Petrol stations are sparse between Vík and Mývatn, so please keep a close eye on your fuel levels. It is better to fill the tank when you have the chance rather than risk running out of fuel.

Parking in Iceland

Few hotels in central Reykjavík offer overnight parking for their guests. But you’ll find metered parking in many downtown areas. Parking garages are another option, they are marked with a “P”.

Outside the capital, paying parking can be found at many popular natural attractions, particularly at major stops along the south coast like Þingvellir National Park, Reynisfjara and Jökulsárlón.

The average fee is between 750-1,000 ISK. This often has to be paid on arrival, so make sure to check not to incur a late payment charge. This fee can typically be paid through the Parka.app (unless otherwise stated) and is used to offset costs for maintenance and preservation of the area.  

Paying car parks are always clearly marked, so make sure to check. Otherwise, do not create an obstruction and do not park on private land.

Parking fines

Fines for parking violations generally range between 5,000 ISK to 10,000 ISK and can be paid at any bank. If paid within 3 business days, the fine is reduced by a small amount. But don’t wait to pay the fine as the more time elapses, 2-4 weeks, the larger the fine becomes.

Thinking of exploring Iceland by car? Browse our self-drive tour packages.