Car rental in Iceland: rules, F-roads and tips

In Iceland, renting a car is the most common way to travel outside Reykjavik: waterfalls, glaciers and fjords are far from the bus lines. You usually collect it at Keflavik airport, where four rental companies have a desk in the terminal and dozens of others run a shuttle or meet-and-greet service. The rules are strict: headlights on at all times, a very low alcohol limit, no off-road driving, and F-roads reserved for suitable 4x4s in summer.

This guide draws on Safetravel, the prevention site of the Icelandic Association for Search and Rescue (ICE-SAR), on the official Keflavik airport page, on UK and US government travel advice and on island.is. It gives no prices. To prepare your trip, see our Iceland guide, when to go to Iceland and our Reykjavik page.

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Do you need to rent a car in Iceland?

For a stay limited to Reykjavik and the classic excursions (Golden Circle, south coast), organised tours may be enough. As soon as you want to drive round the island on Route 1, stop where you like or sleep on isolated farms, a car is the most flexible solution. In return, you must follow the weather and road conditions every day.

Your plan	Suitable vehicle	To check
Summer, Route 1 and paved roads	Ordinary car	Gravel and windscreen cover in the contract
Summer, F-roads (Landmannalaugar, Askja…)	4×4 approved for F-roads by the rental company	Whether the roads are open on umferdin.is; river crossings excluded from all insurance
Autumn, winter, spring	Vehicle equipped for winter; 4×4 useful off the main roads	Weather bulletins, road closures, short daylight hours
Winter, F-roads	No ordinary rental vehicle	Roads closed: only modified vehicles with an experienced driver get through

Licence, age and documents

US drivers: according to the U.S. Department of State (travel.state.gov, last updated May 14, 2026), you can use a valid US driver’s licence for up to 90 days while visiting Iceland, but you must be at least 17 years old to drive. UK drivers: according to the UK FCDO (GOV.UK, updated 11 August 2026), you can use a UK photocard driving licence in Iceland for up to 30 days; with a paper licence you may need to update it to a photocard or also get the 1968 version of the international driving permit (IDP). The FCDO adds that hire companies often have stricter requirements, such as a year of driving experience, a higher minimum age and holding an IDP. Island.is says an international permit is only valid together with a national licence. We found no official Icelandic page stating the rule explicitly for tourists, so check your rental company’s terms for the licences it accepts and for the minimum age and licence seniority, which vary by vehicle category.

Situation	Official rule
Built-up areas	50 km/h (31 mph) unless signed
Gravel road outside built-up areas	80 km/h (50 mph)
Paved road outside built-up areas	90 km/h (56 mph)
Single-lane bridge	50 km/h (31 mph); priority generally goes to the vehicle closest to the bridge: slow down and watch the other driver
Lights	Front and rear lights on at all times, all year (automatic mode is not always enough)
Alcohol	0.2 per mille according to Safetravel; the U.S. Department of State says charges are possible from 0.05%
Seat belts	Compulsory for all occupants, in every seat
Children	Suitable child seat below 135 cm (4 ft 5 in)
Phone	Using it while driving is prohibited (the State Department notes an exception for hands-free systems)
Two-lane roundabouts	The vehicle in the inner lane has priority when exiting

Off-road driving, F-roads and river crossings

Safetravel is categorical: off-road driving is strictly forbidden. F-roads and gravel roads are not off-road, but leaving them is. The UK FCDO also says off-road driving is strictly controlled. Damage to vegetation and volcanic soils takes years to heal, and offenders face prosecution; we found no official scale of fines to quote.

F-roads (highland roads) suit only some 4x4s, and they are not all equal: some accept a small SUV, others require a large 4×4 or a modified vehicle. They are generally closed from mid-September until June or July; check whether they are open on umferdin.is. The UK FCDO says many highland tracks are open only for a short part of the summer, and to drive slowly (5 to 10 km/h, or 3 to 6 mph) when crossing rivers, as river levels can change quickly within a day. Above all, Safetravel stresses that no insurance covers damage to a vehicle while crossing a river: if in doubt, turn back.

Hazards specific to Icelandic roads

• The switch from asphalt to gravel: slow down before it, the tyres lose grip. The U.S. Department of State notes that less than one-third of Iceland’s road network is paved.
• Single-lane bridges and tunnels: the State Department says many bridges are one lane wide (sign “Enibreid bru”), so be alert to oncoming traffic.
• Sheep roaming on or beside the road, especially when lambs are on one side and ewes on the other.
• Photo stops: never on the carriageway or the verge; look for a safe lay-by.
• Closed roads: “Lokað” means closed. Maps do not always show closures.
• Fatigue after a night flight: do not set off exhausted as soon as you land.
• Weather changes fast; Safetravel advises checking conditions in the morning and several times a day, and offers an alert app. The State Department also recommends the safetravel.is and road.is sites and apps year-round.
• Wind, sand and ash: the FCDO says weather can damage rental cars in ways not covered by insurance, that strong winds can throw up sand or ash and damage paintwork, and that breakdown recovery costs in remote areas can be high.

Where to collect your car: Keflavik airport

The “Car rental” page of Keflavik airport distinguishes several cases:

• Desks in the terminal: Avis (with Budget and Payless), Europcar (with Goldcar, Bílaleiga Akureyrar and Touring Cars), Hertz (with FireFly) and Sixt (with Flizzr), with a vehicle pick-up area on site.
• Shuttle from the “Other Buses” area: Alamo, Enterprise, Lava, Lotus and National.
• Meet-and-greet by a driver in the arrivals hall or pick-up on request for many off-terminal companies.
• Departures hall, entrance C: Go Car Rental and Green Motion.

The airport lists more than 90 rental companies and advises checking that a company advertising “KEF” really has a desk or pick-up on site. Do not confuse Keflavik international airport with Reykjavik airport, which serves domestic flights.

Insurance and excess: what to understand

Every rental includes compulsory third-party liability insurance. Damage to the vehicle and theft are covered by waivers (often called CDW, theft protection or similar) with an excess: the sum that remains payable by you after a claim. The company generally blocks a security deposit on a card in the main driver’s name. In Iceland, look especially at exclusions for gravel (windscreen, bodywork), sand and ash, wind (doors torn off) and, of course, river crossings.

There are three options: accept the excess, buy it back at the counter, or take out third-party “excess insurance” (you then pay the amount up front and are reimbursed). Some credit cards include rental cover: read the terms, because exclusions (glass, tyres, underside, tracks) are common. Our travel insurance guide explains the differences.

Pick-up and return checklist

• Photograph the vehicle, windscreen and wheels; have every mark noted.
• Check the tyres (and their type in winter) and the spare wheel.
• Ask whether the vehicle is allowed on F-roads and gravel roads.
• Note the fuel or charge level (electric vehicle) and locate stations on your route: they are far apart in the east and the Highlands.
• On return, allow time for the shuttle if your rental company is not in the terminal.

Connectivity and emergencies

The emergency number is 112 (UK FCDO and U.S. Department of State). The FCDO advises leaving your travel plans with Safe Travel Iceland, and the State Department says to always inform someone of your plans. Whether your phone works at home rates in Iceland depends on your carrier: our Iceland eSIM page and our travel eSIM guide explain the alternatives.

Common mistakes to avoid

• Believing that “4×4” means “allowed everywhere”: check the permitted roads in the contract.
• Crossing a ford “like the others”: no insurance will cover the damage.
• Stopping on Route 1 to photograph a waterfall.
• Driving with the lights off in daytime.
• Planning long stages in winter without allowing for daylight hours and closures.

Booking your car rental in Iceland

You can book directly with a company present at the airport or use a comparison site, which shows several offers at once. Either way, compare the actual rental company (the one that will hand you the keys), the desk location (in the terminal or by shuttle), the amount of the excess and deposit, the mileage, the fuel policy, additional or young driver fees and the cancellation terms.

Frequently asked questions

Our sources

• Safetravel (ICE-SAR), “Driving in Iceland”, “Top 12 tips” and “Highland driving” pages, read 24 October 2026.
• Keflavik Airport, “Car rental” page, read 24 October 2026.
• Island.is, pages on foreign licences and the international driving permit, read 24 October 2026.
• UK FCDO, foreign travel advice for Iceland (GOV.UK, updated 11 August 2026), read 26 October 2026.
• U.S. Department of State, Iceland country information (travel.state.gov, last updated May 14, 2026), read 26 October 2026.
• Our methodology

Updated October 2026. Rules, rental company lists and conditions may change: check the official sites before you go.