Blue Lagoon Iceland
Blue Lagoon Iceland
Godafoss Waterfall
Godafoss Waterfall
Reykjavik City Water
Reykjavik City Water

About the Iceland (IS)

Situated just south of the Arctic Circle in the North Atlantic Ocean, Iceland is an island oasis of breath-taking, unspoiled natural beauty, with a notably mild climate that belies its name. With the majority of the human population centered in the western city of Reykjavik, and to lesser extent, the city of Akureyri in the north, much of the island is a stunning, uninhabited landscape of mountains, volcanoes, and a shrinking number of glaciers. Popular destinations and attractions include summertime whale-watching in Húsavík, catching the Northern Lights in the hip city of Keflavik, and Europe’s largest national park, Vatnajökull National Park — home to Iceland's, largest glacier (Hvannadalshnúkur), highest mountain (Vatnajökull), and Europe's most voluminous waterfall (Dettifoss).

  Getting around

Getting around Iceland is somewhat of a Catch-22 for visitors. On one hand, public transportation outside of Reykjavik is extremely limited, and you’ll have far more freedom and flexibility if you rent a car. Conversely, Iceland car rental rates are significantly above the European average, and petrol is comparably expensive. While major roads are in good condition, rural routes are subject to wet weather in all seasons, and frequently impassable or closed altogether. You’ll be able to access all of the major attractions without much of a hassle, but getting off the beaten path is prohibitive. And that’s probably a good thing, because Iceland is very protective of its pristine landscape. Disturbing the environment by off-road driving is both illegal and considered extremely disrespectful.

Generally speaking, driving in the developed areas of Iceland is manageable with a two-wheel drive car hire, but reaching the more isolated areas such as Landmannalaugar will require a four-wheel drive vehicle. River crossings are exceedingly common, and road conditions range from rough to downright dangerous if you venture off the main highways in rural areas. So plan and be aware to get the most out of the stunning beauty of the country.

  Choosing your car

Europcar and Sixt lead the way in Iceland car rentals, but you’ll also find cars on offer from Avis, Budget, Hertz, and Thrifty. Given the rugged terrain and general road conditions, all-wheel drive SUVs are by far the most popular vehicles. But of course, you’ll have a wide range of cars to choose from: Compact 4-door sedans and economy 3-door hatchbacks, standard and intermediate 4-door sedans, and 7-12 seater minivans for groups of 5 or more passengers.

  Tips and advice for renting a car in Iceland


It’s recommended that you avoid solo travel to remote locations in Iceland. For any travel to isolated areas, be sure to notify someone of your destination, and locate some guesthouses along the route in case of inclement weather.


You’re also encouraged to book your Iceland car hire as far in advance as possible, particularly during the peak summer tourist season. Major car rental companies quickly sell out of all-terrain vehicles, leaving slim pickings for the latecomers. Meanwhile, it’s very possible to rent a car in Iceland without a reservation outside of the months of June, July, and August. That said, cheap car rentals are always more plentiful when booked in advance. Walk-up renters pay markedly higher prices.


Driving on Iceland’s F roads (c.g. F50) requires all-wheel drive and (usually) snow tires.


Self-service fuel stations generally operate 24 hours, but you’ll need a credit card with a PIN number. Prepaid cards can be purchased from most fuel stations, eliminating the need for a PIN.


Outside of developed areas, road services are few and far between. It’s suggested to never let the fuel gauge dip below half-full.


Most roads in Iceland are paved with black volcanic gravel (basalt) that can wreak havoc on a car hire. Be very clear about your liability for damage caused by road conditions before hitting the road in Iceland, and acquire additional coverage if you’re heading out to remote areas.

Urban Speed Limit


50 kph  | 31.1 mph
Rural Speed Limit


80 kph  | 49.7 mph
Motorway Speed Limit


100 kph  | 62.1 mph
Fuel Price




Road Driving


Driving Age


18 years of age
21 years of age to RENT
Emergency Services


Documentation requirements



Iceland Driving Ideas Guide

A stunningly beautiful island situated in the Atlantic Ocean, Iceland is fast becoming a very popular tourist destination. Despite its name, the island has a fairly mild climate in parts. In fact, the word Iceland is Icelandic for “island”.

Iceland is fairly desolate but still incredibly beautiful. Most tourist visit during the summer, as more daylight hours are available to discover this incredible destination. Many spend their time in the capital Reykjavik although there is much to see and do around the rest of the island.

Iceland is just waiting to be explored by rental car, in fact many attractions including numerous glaciers and volcanoes are easily accessible.  Other than these, Iceland has three national parks, as well as a host of other attractions including Blue Lagoon, the Golden Falls, Geysir (hot geysers) and Jokulsarlon glacial lagoon. Iceland is famed for its Ring Road (or Route 1) that encircles the Island. Many adventurous travellers have spent a fair number of days (you will need at least 10) to travel the whole route.

Ring Road — South West Attractions — Reykjavik to Vik

2 hours 30 mins (186 km) (115 miles)

The south-west of the country, near Reykjavik is filled with many attractions, all easily accessible by rental car and perfect for a day trip outside the capital. This area is fairly flat and filled with farmlands.

Attractions include the Hvita River (perfect for white water rafting), Hekla volcano, Myrdalsjokull and Eyjafjallajokull glaciers, Seljalandsfoss and Skogafoss waterfalls (one of the islands most popular attractions) and the small coastal town of Vik with its amazing black volcanic beach.

Accommodation can be found in many small towns such as Vik and include lodges and guest houses and bed and breakfast establishments.

Ring Road — South East Attractions — Reykjavik to Skaftafell

3 hours 30 mins (319 km) (198 miles)

Travelling further east along the Ring Road will take you through the south-east of the island. One of the major attractions in this region is the Skaftafell National Park, a beautiful region of lush, green landscapes as well as some glaciers. Attractions in the park include various hiking routes as well as the Svartifoss or Black Waterfall, which is surrounded by dark basalt columns.

Other worthwhile locations include the magnificent Jokulsaron glacial lagoon and the small town of Kirkjubaerjarklaustur, home of only 150 people.

Ring Road — North Attractions — Reykjavik to Akureyri

4 hours 32 mins (379 km) (235 miles)

A trip to Akureyri, the capital of the north can be considered, although it is a far distance and you probably will need overnight accommodation.

Attractions in the north include Myvatn lake, filled with numerous hot springs, caves and an abundance of Icelandic birdlife. The town of Akureyri is the premier destinations for skiers in the country and is situated on its own fjord. Finally, the ‘gateway to hell’ or Dimmuborgir is an imposing collection of rock formations, hence its nickname.

Cheaperthancars and Cheaperthanhotels are the leaders in providing cheap rental car options as well as budget accommodation, saving you money and helping you to enjoy your vacation.

Your Cheaperthancars Team

Iceland Driving Rules and Tips

To see some of the best sites in Iceland, you’ll need to take a car. Iceland doesn’t have a train system, though you can see some areas by bus. Nonetheless, if you want to get around by car, the following information will help you when driving in Iceland.


You will need the following documents:

  • A valid driver’s license from your country.
  • International Driver’s Permit, especially if you don’t have an EU license. Buy it in your home country before you leave.
  • Official photo ID (passport).
  • Proof of insurance if using a rented car (Call ahead to make sure you will be covered.) You may need a third-party proof of insurance, such as a green card, if you are not from a recognized country.
  • Ownership papers for the car you are driving or a letter from the owner.

Age Restrictions

The legal age to drive in Iceland is 17. You must be 21 to rent a car.

Driving Rules, Laws, and Regulations

  • Drive on the right hand side of the road; pass on the left.
  • A dashed line means you can pass, while a solid line means you can’t; all center lines are white.
  • Many roads will be unpaved, especially in rural areas.
  • Use your headlights at all times, even during the day.
  • Though road hazards will be marked, signs will not offer lower speeds; you must decide on a safe speed.
  • All people in the car must wear a seatbelt.
  • Use a hands-free set if you want to talk on your cellphone.
  • Share the road; Iceland has an abundance of bicyclists. Also, be ready for livestock (such as sheep) on the road.
  • You can bring your own car by ferry from Europe.
  • Icelanders aren’t particularly aggressive drivers, and they don’t pass very often.
  • Call 112 in case of emergencies.

Speed Limits and Fines

Like many countries, speed limits will be posted in kilometers per hour. Generally, the top speeds are as follows:

  • 30 km/h (18 mph) on Residential
  • 50 km/h (35 mph) on Other urban areas
  • 80 km/h (48 mph) on Unpaved rural roads
  • 70-90 km/h (42-54 mph) on Highways

Speeding fines go up based on how many kilometers per hour you are over the speed limit, as well as the speed zone. Be aware that police can demand on-the-spot fines. Generally, the fines are as follows:

  • 5-10 km/h over: 5,000 króna.
  • 11-15 km/h: 10,000 króna.
  • 16-20 km/h: 15,000 króna.
  • 21-25 km/h: 20,000 króna.
  • 26-30 km/h: 25,000 króna.
  • 31-35 km/h: 45,000 króna, plus 3 months of license suspension.
  • 36-40 km/h: 55,000 króna, plus 3 months of license suspension.
  • 41-45 km/h: 70,000 króna, plus 3 months of license suspension.

Fines can be much higher in higher speed zones.

Drunk Driving

Iceland’s legal Blood Alcohol Content (BAC) limit for driving is 0.05g/100ml, the equivalent of one drink per hour. However, many residents insinuate that the police are even stricter than that level; if they even smell alcohol on your breath, you can face a penalty, such as:

  • 100,000 króna fine
  • Loss of license
  • Jail time


Most parking in the city will be pay-to-park and one of several options:

  • Hotel parking: It may or may not be free. Some charge as much as 2,000 króna per day.
  • Pay-and-display: Buy a ticket, and display it on your windshield. You can pay for a whole day and use a credit card.
  • Meters: These only take coins. Expect to pay about 250 króna per hour.
  • Parking garages: They are often only open during the week.

Overall, driving in Iceland should be a safe and pleasurable experience. Respect other drivers and the posted road signs, and you should be fine.