Driving Guide

Iceland Driving Guide

Driving in Iceland is the only way to fully experience this island nation’s stunning beauty. Check these essential tips, get your International Driving Permit and you’ll be ready to go.

2021-08-06 · 9min read

Get an International Driving Permit to experience Iceland’s stunning geological and man-made wonders.

Iceland, often hailed as the land of fire and ice, is at the top of many travelers' bucket lists. This unique destination, where icy glaciers and volcanic landscapes meet, captivates visitors with its breathtaking natural phenomena, particularly at night.

Exploring Iceland by car is the best way to experience its splendor. However, the prospect can be intimidating, especially given the challenging road conditions and the additional complexities of winter driving.

We are far from experienced winter drivers, but we decided to bite the bullet because we aren’t tour people and didn’t want to be confined to the city. We spent 11 days road tripping Iceland and learnt a lot along the way. Overall, we’re so glad we rented a car and wouldn’t do it any other way, but there are a number of things to consider before you do.

Cat and Joe, a traveler couple, share in their post Driving in Iceland in winter: is it safe for tourists?, published on their website, Walk My World.

Our guide is designed to equip and encourage you to confidently navigate one of the most breathtakingly beautiful places on the planet. With the right guidance and preparation, driving through Iceland is not just possible but also an unforgettable experience!

Let's Take a Closer Look at Iceland

Before diving deeper into Iceland's driving culture and etiquette, here are some interesting facts about this beloved Nordic country:

Location and Landscape

Iceland, a Nordic island nation, is situated in the North Atlantic Ocean and is often considered a part of Europe despite its proximity to Greenland, which falls under North America. Contrary to its name, only about 10% of Iceland is permanently covered in ice, unlike Greenland, which experiences colder temperatures.

The country, encompassing about 40,000 square miles, is known for its volcanic and geological activity and diverse terrain featuring sand, lava fields, mountains, and glaciers. Despite its near-Arctic location, Iceland remains ice-free in summer due to the warm North Atlantic Current.

Languages and Population

Icelandic, an Indo-European language belonging to the North Germanic subgroup, is the official language, closely related to Norwegian and Faroese and influenced slightly by ancient Celtic literature. Remarkably consistent since Iceland's settlement in the 9th and 10th centuries, Icelandic maintains its traditional Scandinavian characteristics and grammatical genders.

The most spoken languages are Icelandic (93.2%), Polish (2.71%), and Lithuanian (0.43%). With a population of around 300,000, predominantly Icelandic, it is Europe's least densely populated country. Iceland also boasts the lowest taxes among Organization for Economic Co-operation and Development (OECD) countries and the highest trade union membership globally.

Historical Development

Settlement in Iceland began between 874 and 1262 AD, initiated by the Norwegian chieftain Ingólfr Arnarson, as documented in the ancient Landnámabók manuscript. The Althing, established by 930 AD, served as the legislative and judicial assembly of the Icelandic Commonwealth.

Economic transformations in the early 2000s led to a significant increase in national income through deregulated banks, followed by a major financial crisis in 2008. However, the economy stabilized and grew by 2012.

Government and Social System

Iceland's government is a representative democracy and a parliamentary republic, with the Althing, established in 1845, being one of the world's oldest parliaments. Traditionally, Icelandic governments have been coalitions, as no single party has ever dominated the Althing.

The country upholds a Nordic social welfare system, ensuring universal healthcare and tertiary education for its citizens. Iceland ranks high globally in median wealth per adult, human development, and peace, reflecting the success of its social policies.

International Driver's Permit FAQs

An International Driver's Permit (IDP) is a supplementary document that enables you to rent and self-drive in the country you are visiting. It is beneficial for overcoming language barriers in everyday road situations like speeding.

What are the Benefits of an International Driver's Permit in Iceland?

Having an International Driver's License for Iceland is one of your requirements to rent a car. It is also useful when you ever come across any road situations like overspeeding because it can eliminate language barriers if you and the officer can not understand each other. An International Driver's License for Iceland is also an authorization that allows you to self-drive on your vacations and agree to their terms and conditions when driving.

If you plan to visit Iceland in the next few years, you can apply for an IDP now, with IDP package options for one, two, or three years of validity. Acquiring an IDP well in advance can be more economical and allows ample time for travel planning. You can apply for an IDP at a government office in Iceland or conveniently online, mainly if your vacation time is limited.

Is Your Local License Valid in Iceland?

Using a foreign driver’s license in Iceland is generally accepted. However, language barriers may pose challenges, as Icelandic authorities or car rental services might struggle to understand your license. You need an IDP because it translates your license into over ten languages and can effectively resolve these language issues.

Does an IDP Replace Your Native License?

It's important to note that an IDP does not replace your native driving license. While driving in Iceland, both your native license and the IDP are required. The IDP is specifically for use within Iceland and is not valid for driving in your home country. Additionally, it is a mandatory requirement by car rental companies in Iceland.

An IDP is limited to the countries specified in the document and cannot be used in your home country. It serves as a translation of your native license, making it understandable in more than ten languages, thus aiding in communication with local authorities in the host country.

Renting a Car in Iceland

With your International Driver's Permit for Iceland ready, finding the best car rental company is your next step to discovering Iceland's stunning landscapes by car. Renting a car is often more practical for tourists than using their vehicles for a road trip in Iceland. Consider the best car rental in Iceland:

Car Rental Options in Iceland

Traveling in Iceland can be challenging due to limited bus services and the absence of a public railway system. However, renting a car is a common and convenient choice for tourists, allowing them to make the most of what Iceland offers.

Selecting the right car and rental agency can be daunting, so here are some of the top car rental services in Iceland:

Lotus Car Rental

Situated at Keflavik International Airport, Lotus Car Rental is a popular choice, known for its transparent pricing without hidden fees. They have a range of vehicles suitable for various Icelandic conditions, from small city cars to robust 4x4s. They also accept credit card payments.


Hertz, a globally recognized rental agency, offers many vehicles, including 4x4s and camper cars, ideal for exploring Iceland's landscapes. They allow pre-booking online or direct booking at their Keflavik International Airport office.

Blue Car Rental

Founded in 2010 and based at Keflavik International Airport with a branch in Reykjavik, Blue Car Rental offers a diverse fleet to cater to different travel needs.

Camping Cars

For tourists interested in camping amidst Iceland's natural beauty, Camping Cars provides a variety of camping vehicles. Located at Keflavik International Airport, they ensure convenient pick-up and offer comfortable rooftop tent-equipped vehicles.

Icelandic Car Rental

Known for excellent service and a wide range of vehicles, Icelandic Car Rental is conveniently located at Keflavik International Airport. It offers a shuttle service from the airport to their office in Reykjavik.

Documentation and Requirements

Before renting a car in Iceland, you'll need to present:

  • A valid driver's license held for at least one year
  • An International Driver's Permit
  • Your passport
  • A valid credit card for payment
  • Proof of any driving endorsements (for UK license holders, except Northern Ireland)

Vehicle Types and Rental Costs

When choosing a rental car, consider the weather conditions, road types, and whether you can drive a manual vehicle, as many rentals in Iceland are manual.

Vehicle options include:

  • Two-Wheel Drive: Ideal for city trips and paved roads, costing around $40-$100 daily.
  • Four-Wheel Drive: Suitable for off-road trails, priced at $75 - $250 per day or more for luxury models.
  • Campervan: For those planning to camp, it costs between $140 to $250 per day.

The average rental cost is approximately $84 per day, depending on the company and vehicle type.

Age and Insurance Requirements

The minimum age for car rental is 20 years for standard vehicles, with a young driver fee for those under 25.

Insurance is a crucial aspect of car rental in Iceland. The best car insurance in Iceland offers various options to cover different aspects, such as third-party liability, collision damage, and gravel protection.

Each insurance policy has a self-risk amount, and some companies offer bundles with zero self-risk. Be sure to understand the terms thoroughly before signing the contract.

Key Driving Regulations in Iceland

Understanding Iceland’s driving rules is crucial before hitting the road, as ignorance could lead to fines or serious injuries. Below are some essential rules to be aware of when driving in Iceland.

Age Restrictions for Drivers

Iceland requires local drivers to be at least 17 years old. For tourists looking to drive or rent a car, the minimum age is 20. Car rental options may vary depending on your age, as drivers under 25 might face additional fees.

Driving Orientation

In Iceland, driving is on the left side, similar to many countries worldwide. This might require some adjustment for those accustomed to driving on the right.

Speed Limit Enforcement

Be aware of varying speed limits: 30-50 km/h in urban areas, 90 km/h on paved roads, and 80 km/h in rural areas. Speeding can lead to substantial fines, reaching up to 30,000 ISK (around 247 USD).

Zero Tolerance for Drunk Driving

Driving under the influence of alcohol or drugs is strictly prohibited in Iceland, especially due to the challenging winter road conditions. Offenders face heavy fines and driving bans.

Off-Road Driving Prohibition

It's important for travelers to distinguish between driving off-road (illegal and heavily fined) and driving on F-roads (marked dirt roads requiring 4x4 vehicles).

Mandatory Seatbelt Use

Seatbelt use is compulsory in Iceland, with fines for non-compliance. This rule applies to all passengers, including children.

Parking Facilities

Iceland offers various parking options, including overnight spots for camper vans and both free and paid zones.

Driver’s License Requirements

Always carry your local and International Driver's License. Tourists are required to carry an International Driver's Permit alongside their native license.

Headlight Usage

Headlights must always be on, both day and night, as a safety measure.

Roundabout Navigation

In two-lane roundabouts, the inner lane has priority over traffic on the outer road. This is crucial as being unaware of this rule is a leading cause of accidents.

Prohibition on Mobile Phone Use

Using a mobile device while driving is illegal in Iceland. Hands-free devices are recommended for convenience.

Stopping Safely

Never stop in the middle of the road. Use designated areas for rest or photography.

Local Assistance

Don’t hesitate to seek help from locals; they are generally helpful and friendly.

Understanding Traffic Signs

Familiarize yourself with unique Icelandic road signs, including warnings for animals, crosswinds, and road surface conditions.

Right of Way Rules

The right of way is typically given to traffic from the right unless otherwise indicated by signs or signals.

Overtaking Laws

In Iceland, overtake on the left and drive on the right, as vehicles operate on the left side of the road.

Being well-versed in these rules will ensure a safer and more enjoyable driving experience in Iceland.

Driving Etiquette In Iceland

When navigating the roads of Iceland, it's important to adhere to their driving etiquette for safety and compliance with local laws. Whether it's handling car breakdowns or interacting with the police, understanding these practices is crucial.

Handling Car Breakdowns

In case of a major car breakdown where your location is unclear, stay with your vehicle until help arrives or contact your rental agency for assistance. If a spare is available for minor issues like a flat tire, you can replace it yourself.

In emergencies, dial Iceland’s emergency number, 112, immediately. If stranded on F-roads, stay in your car until rescue teams arrive, as these areas are regularly patrolled.

Police Interactions for Speeding

If stopped by police for speeding, you'll typically have the option to pay the fine immediately or receive a ticket by mail. Paying on the spot offers a 25% discount. Ensure you obtain a receipt for an on-the-spot payment. If you opt for mail, the car rental company may charge a handling fee, as they must provide your information to the police.

Asking for Directions

With Icelandic being challenging for non-speakers, here are some basic phrases to help you ask for directions:

  • "Hvar er stiginn?" (Where are the stairs?)
  • "Hvernig get ég komist til Reykjavíkur?" (How can I get to Reykjavík?)
  • "Hvar er salernið?" (Where’s the restroom?)
  • "Hvar er næsta bensínstöð?" (Where’s the nearest gasoline station?)
  • "Her er veðurskilyrðin í dag?" (What is the weather condition today?)

At checkpoints, remain calm and cooperate with the officers. Answer their questions and provide the necessary documents, including your driver's license. If there's a language barrier, an International Driver’s Permit can be helpful as it translates your native license into multiple languages.

Being aware of these etiquettes and prepared for various scenarios will ensure a smoother and safer driving experience in Iceland.

Driving Situations and Conditions in Iceland

Before exploring the best things to do in Iceland, staying informed about the weather and road conditions is crucial, as the weather can change rapidly. Preparing for slippery roads or needing special tires is essential for safe travel.

Road Safety and Accident Statistics

Iceland is committed to road safety, with stringent policies to protect residents and visitors. Thanks to efforts by the Icelandic Transport Authority, there was a significant decrease in non-fatal road accidents in 2018 compared to the previous year.

The Authority plays a key role in educating visitors about local weather and driving conditions to reduce accident risks.

The two most common vehicle types for exploring Iceland's diverse landscapes include:

  • Two-Wheel Drive: Ideal for city driving, these vehicles often come with studded tires for better traction in icy conditions. Rental costs range from $40-$100 per day, varying by model and season.
  • Camper Van: Both 2WD and 4WD varieties are available. These are popular for tourists who want to camp and experience Iceland's natural beauty. Rental prices for camper vans range from $140 to $250 per day, depending on the model and season.

Toll Roads

In Iceland, there's only one toll road, the Vaðlaheiðargöng tunnel on Route 1 near Akureyri. Be prepared with cash in case credit cards are not accepted.

Road Conditions

Always check road conditions and weather forecasts, especially for long drives. For updates, you can consult the Public Roads Administration, tourist information centers, hotel staff, restaurants, or petrol stations.

Winter driving can be particularly challenging, and it's often mandatory to use winter tires for safer travel. Understanding potential road hazards is vital for choosing the best time to visit Iceland and for a safe journey.

Types of Roads in Iceland

Roads in Iceland vary:

  • Primary roads: Well-maintained, usually paved, and have one or two digits.
  • Secondary Roads: Less maintained, these roads have three digits.
  • Mountain Roads: Marked with an "F," these are for four-wheel drives and are closed in winter.

Driving Culture

Icelanders are known for their safe driving habits, particularly during the winter when conditions can be treacherous. They follow safety rules diligently, and locals are often willing to assist if you encounter car troubles. Adhering to road rules is imperative, especially for winter self-drive tours.

Discover Iceland's Top Destinations

From active volcanoes and geysers to hot springs and glaciers, Iceland offers a range of experiences that nature enthusiasts dream of. For those planning to explore Iceland’s majestic landscapes, here are some of the best places to visit in Iceland that offer a magical, fairy-tale-like setting for an unforgettable road trip:

Jökulsárlón Glacier Lagoon

Formed around 1935 and experiencing rapid expansion, Jökulsárlón Glacier Lagoon is expected to continue growing into a vast fjord.

Activities at Jökulsárlón:

  • Boat Tours: Available in summer and winter, these tours showcase the area’s majestic glaciers and wildlife.
  • Ice Caving: Explore the striking blue ice caves within the Vatnajökull glacier.
  • Ice Climbing: For the adventurous, ice climbing offers a unique way to experience the lagoon and possibly view the Aurora Northern Lights.

Skaftafell Nature Reserve

This former national park in southeast Iceland covers over 4800 square kilometers, featuring diverse landscapes and unique geological formations.

Things to Do in Skaftafell:

  • Hiking: Known as a hiker's paradise, Skaftafell offers trails leading to stunning sites like the Svartifoss waterfall.
  • Ice Climbing and Glacier Tours: Explore the area's glaciers or climb Hvannadalshnúkur, Iceland’s highest peak.

Snaefellsnes Peninsula

Often described as “Iceland in miniature,” the Snaefellsnes Peninsula in West Iceland is home to diverse geological phenomena.

Discoveries in Snaefellsnes:

  • Hiking at Snaefellsjökul: A glacier-capped volcano offering breathtaking hikes.
  • Visiting Kirkjufell Mountain: Surrounded by streams and rivers, it's a must-see location.
  • Ytri Tunga Seal Beach: A habitat for seal colonies, best visited in summer.

The Westman Island

This archipelago off Iceland’s southern coast is known for its largest island, Heimaey, and the world’s biggest puffin colony.

Exploring the Westman Islands:

  • Eldfell Volcano: Visit the crater and the Eldheimar museum, built over a house buried in the ash of the 1973 eruption.
  • Heimaey Town: Explore the Aquarium and Natural History Museum, the white church, and the Folk Museum to learn about local history and marine life.

Get an IDP to Explore Iceland

For an adventurous and rejuvenating holiday, consider Iceland as your next destination. Secure an International Driving Permit, and prepare for what could become your most enchanting and memorable driving experience yet!


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