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 for 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 rental car is allowed to drive on.
Be well prepared and respect the traffic rules to minimize the risk of road accidents. Up-to-date information about weather and roads on Iceland can be found here: Safetravel.is