Last updated: April 2026
Driving in Iceland: What You Need to Know
Before you rent a car in Iceland, here are the essential driving facts:
| Drive Side | Right |
|---|---|
| International Driving Permit | Recommended |
| Speed Limit (Motorway) | 90 km/h |
| Average Fuel Price | ISK 310/L |
| Minimum Rental Age | 20+ |
Sources: Icelandic Road Administration · SafeTravel Iceland · Vedur.is (Weather Service)
💡 Insider Tip
A 4WD is essential for F-roads in the highlands — standard insurance never covers gravel damage or river crossings.
Best Cities for Car Hire in Iceland
Iceland has effectively one rental hub at Keflavik — Reykjavik itself has minimal rental infrastructure and most visitors collect their car directly at the airport before heading out on the Ring Road.
Iceland's Ring Road (Route 1) is one of the world's great road trips — 1,322 km of glaciers, volcano...
Car hire in Reykjavik →Best Time to Rent a Car in Iceland
Icelandic rental prices peak during the summer tourism season from June through August, when the Ring Road and highland F-roads are accessible and daylight stretches to nearly 24 hours. Christmas and New Year see significant spikes as Northern Lights tourism peaks. The cheapest months are October, November, and February through April. Daily rates for a compact car run roughly 8,000 ISK in shoulder season versus 18,000 ISK in peak summer. 4WD vehicles cost dramatically more — often double the price of compacts — but are essential for highland exploration. Booking 6+ weeks ahead is essential for summer trips, particularly for 4WD vehicles which sell out completely. Winter rentals require studded tyres which are typically included automatically from November through April.
Common Rental Mistakes to Avoid in Iceland
The biggest mistake on Icelandic rentals is taking a 2WD vehicle on an F-road — these highland routes legally require 4WD, and crashes or damage on F-roads void all rental insurance entirely. Many of Iceland's most spectacular destinations are F-road only, so plan vehicle choice accordingly. Second, river crossings are an Iceland-specific hazard — rental insurance never covers water damage from fording rivers, even with 4WD vehicles. If you're not certain about a crossing, turn around. Third, Icelandic weather changes by the minute — sudden wind gusts have torn rental car doors clean off when opened in exposed parking areas. Always face the car into the wind before opening doors. Finally, fuel stations in the highlands are extremely sparse — fill up at every opportunity and carry a spare jerrycan for serious off-Ring-Road exploration.