Driving in Iceland is not difficult but does involve a certain level of challenge. The speed limits are lower and some roads in the mountain areas (highlands) are closed in the winter as they are impossible to use. It is therefore important that you are careful to choose a car that is suited to the roads you plan to drive on.
Most of the mountain roads and the roads in the highlands are gravel roads. Some parts of the Ring road that goes around the island are also gravel road. The coating on the gravel roads is often loose (especially on the edges). Slow down and drive carefully when meeting oncoming traffic. The mountain roads are narrow and are not suitable for high speeds. The same goes for bridges, which often fit only one car at a time. Most of the mountain roads are closed until the end of June, sometimes even longer due to the soil conditions that render them inoperable. When these roads open again you can usually only drive 4-wheel drive cars on them. Take a closer look which roads your hired vehicle is allowed to drive on.
Be well prepared and respect the traffic rules to minimize the risk of road accidents. Up-do-date information about weather and roads on Iceland can be found here: Icelandic State Road Administration
Driving on the Ring Road
The main road that goes around Iceland is known as the Ring Road (or Route 1) and is 870 miles long. The road connects the biggest towns and passes through some of the most interesting parts of the country. Most of the Ring Road is paved and it is two-way in most parts. The speed limit is 50 km (31 miles) per hour in urban areas and 90 km (56 miles) per hour on paved roads in rural areas. It takes about a week to drive around the entire Ring Road at a leisurely pace with many stops along the way.
Driving on gravel roads
From the Ring Road is minor roads lead to a great many interesting sights and small villages. The majority of these are gravel roads that require a little extra attention, but which are generally easy to use in a normal two-wheel drive. The speed limit is 80 km (50 miles) per hour.
Driving in the highlands and on F-roads
In order to drive on so-called F-roads, you will need a four-wheel drive with ground clearance. These gravel roads are often narrow and not made for fast driving. F-roads are designated with an F in front of the route number on signs and on maps. Most F-roads are closed until the end of June or later because of wet and muddy conditions which make them impassable.
Speed limits and other rules
The highest permissible speed in Iceland is 50 km/h (31 mph) in urban areas, 80 km/h (50 mph) on gravel roads and 90 km/h (56 mph) on asphalt roads. By law, headlights are to be used both night and day. There is a law on wearing a seat belt and Icelandic law prohibits driving under the influence of alcohol.