Driving in Iceland: About As Simple As In The United States

You shouldn’t have to feel scared about driving in Iceland even during the winter season because the country takes good care of its roads.

At the rental car desk — *Renting a car in Iceland gives you plenty of independence*

Driving in Iceland: What is needed?

Let’s take a moment to discuss a few common questions about what you’ll need when driving in Iceland.

Which type of vehicle is recommended?

Having a 4WD vehicle is a benefit but not a must in winter. Most roads you would drive on in cities are paved roads, which are also plowed frequently during winter months. In between cities are typically gravel roads, which do not require 4WD. The main exception are what are known as “F-roads” or Icelandic mountain roads. These roads are only open during summertime and only 4WD vehicles are permitted by law.

That said, while 4WD vehicles aren’t necessary, they do come in handy with better traction in the snow, especially if the road hasn’t been plowed yet.

Do you need tire chains in Iceland during the winter?

For the most part, no. All vehicles, including rental cars, are required to have winter tires during the winter months (from November 1 to April 15). For the most part, that’s all you’re going to need when driving here. If you’re just coming in to drive on the major freeways, cruise around Reykjavik, and drive the Golden Circle, winter tires are all you really need.

The roads in Iceland are plowed frequently. When we were here during the winter months, we didn’t see anyone else using chains even during blizzard conditions. That said, we did get stuck behind a truck that could have used them as it got stuck in the snow.

We’d say the main exception is if you’re going somewhere out in the countryside away from the popular sites. In that case, you might want to consider them–or at least be flexible enough to make that drive when there is a break in the weather.

Car seat rules in Iceland

Link to the official Icelandic rules: https://island.is/en/children-in-cars

Children under 135 cm (53 inches) should use a car seat when the car is in motion.

Rear-facing car seats are recommended for children until at least 3 years old. The requirement for rear-facing seats is until 15 months of age and 76 cm (30 inches).
Child car seats must meet European standards according to either R44/04 or R129 (i-size).
The penalty for not using the correct child safety equipment 30,000 ISK ($242 US).

Additionally, children shall not sit in the front seat until they are 150 cm (59″) if there is an air bag. If the air bag is disabled, children can otherwise sit in the front seat.

Importantly, there is no exception in Iceland for taxis. If you take a taxi, you must use a car seat for your child and follow all the same rules as in regular passenger vehicles. Other countries make exceptions for taxis because of the logistics but Iceland doesn’t skip on passenger safety.

Is an International Driving Permit necessary?

If your driver’s license is written with Latin characters (English, French, Italian, German, etc.), you do not need an International Driving Permit (IDP) in Iceland. Car rental companies do not require one for rentals if your driver’s license meets that criteria. Thus, if you’re visiting from the United States, Canada, or most European countries, you do not need an IDP.

Some other related requirements you must meet in Iceland:

You must have held a driver’s license for at least one year.
Drivers must be at least 20 years old for most cars (at least 23 years old for 4WD vehicles).

Auto insurance coverage and do credit cards protect you?

When you rent your car, you’ll be asked about buying additional liability coverage at the counter. The true odds of you getting into an automobile crash are up for you to determine if you’re riskier than average. However, one consideration is the loose gravel you might encounter. Even if you’re a careful driver, you might get hit by rocks from cars driving in the opposite direction or in front of you. Iceland maintains the roads well for a country with as much weather as it gets but even still, potholes happen and gravel goes flying.

We’ve talked previously about travel insurance, which includes some conversation on auto coverage. But one thing you’ll want to specifically pay attention to is the coverage you get internationally. Thankfully, many US-based premium credit cards give excellent primary coverage outside the United States. You could save yourself some money if paying with one of these credit cards. Just remember to bring them with you so you can put your rental charges on that card!

Regardless of what path you choose, we would still recommend taking photos of the rental from all angles before and after your rental. You could try taking a video but submitting a screencap (if necessary) might be a bit blurry. Documenting how you picked up and dropped off the vehicle may protect you against damage claims you didn’t cause.

Is driving with a stick shift a must?

No, generally all car rental companies have vehicles with an automatic transmission. You might pay more for an automatic (and they might also be less fuel-efficient because the car weighs more than manual transmission), but they’re generally available.

You can increase your chances of getting an automatic transmission if you stick to hybrid cars. We wouldn’t recommend fully electric cars because while there are car chargers here and there, it’s not as prominent yet as petrol stations, especially if you venture outside of Reykjavik. That said, most national parks we visited had a couple of electric vehicle charging stations.

What can you expect while driving in Iceland?

It’s a little more challenging to drive in the winter, so we’ll focus more on that. However, we’ve heard that driving in the summer might not always be a walk in the park. You’ll want to pay attention regardless of the season you’re driving in. Iceland has a lot of roads without railings; take your eyes off the road at the wrong time, and you might find yourself unexpectedly off-roading.

Snow is beautiful in the winter but watch for black ice

Iceland can easily look like a wonderland during winter with all the snow on the ground. It’s beautiful to look at and fun to walk in (if you’re wearing the right clothes).

Snowing in Iceland

But driving in it can be a different story. As Southern California residents, we’re not used to driving in winter conditions. The best advice we’ve received comes from two things to keep in mind:

Drive as though you have a full glass of water sitting in the car and try not to spill the water–don’t take turns too tightly.
In winter conditions, assume your tires can only do one thing at once: accelerate, decelerate, or turn. Your car is not a multitasker in the winter.

With those two pieces of advice, we didn’t have any mishaps during our visit to Iceland in the winter.

Don’t be ashamed to take things a little slower and try following another car’s lead if possible until you get the hang of things. Most roads you’ll drive on are plowed often, so just watch for black ice where it feels like you lose some grip on the road and remember not to change your speed on those turns.

If you find yourself stuck in the snow in Iceland, dial 112 to speak to emergency operators.

On some of these roads during a blizzard, it can be hard to figure out where the ground ends and the sky begins. It’s just white-on-white and if not for the plowed road it would be difficult to identify where we’re going.

The mix of snow, sun, and wind can make it very difficult to see the road

There’s one specific mix of conditions that we would offer up as a warning–and one that impacted us a couple of times during the winter season. What you don’t want to see when you’re driving is some fresh powdery snow getting picked up by the wind. When the sun hits it at the right angle, it can get pretty difficult to see the road properly. Just check out the video below as proof of that.

We’ve said it before but we’ll say it again: take your time.

Driving can be difficult

Small roads might not be well-indicated especially at night

If you’re looking to drive around in the winter late at night, which is especially relevant if searching for the Northern Lights, some of the best views might be off the beaten path. If you need to exit the highway, you might find the roads aren’t plowed and–even worse–might not have any indication on where the road ends and the dirt begins. Just take the picture below as an example, which shows you really can’t tell.

We’d only recommend this if you know the roads well. You’re best off leaving the midnight off-roading to the professionals.

Track the weather and road conditions when you’re in town

Very important: track the current road conditions in Iceland at road.is. This site will give you up-to-date information on road closures that might not yet be reflected in your GPS. Before you begin your journey, we’d recommend checking out that site against your intended route in GPS to see if you might need to make adjustments.

Another useful site you should consider on your visit, especially during winter months, is vedur.is/alerts, which will inform you of any alerts. If there is a blizzard passing through, it will impact each region of Iceland differently. Weather can change rapidly, and even if it looks like you’re in the clear when you first check the site, you might not be half a day later.

For us, these are the only two sites we frequently pulled up while we were in town to track conditions.

Costco is home to the cheapest fuel on the island

There is only one Costco on the entire island of Iceland, about 15 minutes outside central Reykjavik. The location of the petrol station is actually across the road from the Costco Warehouse itself, next to Ikea. During our visit, the cost to fill up per litre was anywhere from 10 to 30 ISK cheaper than other fuel stations.

You could use this to fill up your rental car tank before heading back to the airport.

Having a membership card is a must if you want to use this fuel station, but thankfully there were no issues with using a US-based membership. Both Visa and Mastercard are accepted and while American Express is supposed to also be accepted, it didn’t seem to work for me.

Unique rules and road signs to Iceland (relative to the United States)

The inside lane has right-of-way on roundabouts

It certainly feels like roundabouts are the most common type of intersection you’ll come across here in Iceland. We wouldn’t be surprised if someone said there are more roundabouts than stop signs. One thing you’ll want to know about roundabouts is that the inside lane has the right-of-way (and many roundabouts have two lanes).

If you’re in the outside lane, before you exit, you’ll need to peer over your left shoulder to see if someone is next to you and also exiting. If so, you’ll need to let that car exit before you. Of all the differences with Icelandic driving versus somewhere else like the United States, this rule feels the most foreign. It’s also something our rental car company specifically warned us about as we were picking up the vehicle.

Road signs are generally intuitive

We’re not going to go through all the different types of road signs you might encounter. Rather, we’ll say that there’s more of a reliance on pictures than words. In some ways, that’s great because with so many foreigners visiting, understanding road signs is a bit easier.

Take the below road sign, which says that the left lane will merge into the right lane.

Or, this sign says no parking is allowed. Makes sense.

…but the signs might be covered with snow

Road signs are useful, but only if you can read them. Unfortunately, some of them are covered with snow during the winter. To be fair, most signs are easily readable but a few we came across looked like the below picture.

Watch for speed cameras

One thing we want to specifically warn you about is the speed camera. If you get caught speeding by one of these, you’ll see a ticket come to you via your rental car company. On top of the penalty for speeding, your rental company might tack on an administrative fee on top. You don’t want to get caught up by this speed trap.

The good news is if you’re observant, you’ll see that they generally give a warning before you drive by one. You’ll see a road sign with a camera on it before you approach the machine, giving you time to slow down if you happen to be above the limit. But you wouldn’t do that, right?

Aside from a few of these speed cameras, we didn’t find many police on the roads.

Parking in Reykjavik might cost you a fee

Parking a vehicle in Reykjavik out on the streets generally requires paying a parking fee. There are designated areas to park, and you’ll want to keep an eye on the section you’re in. In the picture below, we’ve parked at P2. Knowing which lot you’re in makes it easier if you want to pay at the pay station with the same number. Alternatively, you could download either the Parka or EasyPark apps and pay from your phone.

But, sometimes you might encounter a random day where you don’t need to pay for parking. I wish the pay stations made this more obvious because they simply don’t work on days when payment isn’t necessary–and won’t tell you why. It just errors out. But if you download an app and try to pay, you’d find it might be a payment holiday.

Icelandic road tax from January 1, 2026

Iceland implemented a road tax for all vehicles based on how much you use the roads starting in 2026. This tax is 6.95 ISK per km ($0.056 US per km). If you’re renting a vehicle, expect to pay a fee based on your odometer reading upon returning your vehicle.

However, don’t be surprised to see rental car companies tack on an additional fee for the “administrative services” tied to submitting the paperwork related to this fee. In other words, it’s an opportunity to charge you a little bit extra just because they can.

The tax is intended to help cover the expense of maintaining the roads. It’s not so punitive that it should deter you from driving. These types of taxes used to generally be included in the cost of gas/petrol, but with electric vehicles becoming more popular, it’s now a separate line item. It’s just unfortunate that third-party companies use it as an opportunity to add margin.

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