Choosing a vacation can be a difficult decision if you don’t know what you want to do or whether you want to rent a car. However, if you want to drive some fun roads, check out oil painting-esque landscapes that NASA chose for Astronaut training, and meet some fantastic people, driving around Iceland might be the right move for you. So, instead of heading out on the same type of vacation this year, consider a driving holiday to conquer the Ring Road and see countless natural wonders in Iceland for 2023. 

Can tourists drive in Iceland?

Tourists, including American tourists with valid passports and state-issued driver’s licenses, can drive in Iceland. Moreover, licensed American drivers can rent a car in Iceland without an International Driving Permit (IDP), unlike Australia or Italy-bound tourists. 

However, Iceland has some driving specifics that might confuse visitors. For instance, Iceland uses roundabouts to direct urban traffic, especially around metro centers like Reykjavík or the northern city of Akureyri. Most American cities don’t use roundabouts, so they might be tricky for tourists. Of course, American cities often host millions of inhabitants, whereas Akureyri, the second most populous city in Iceland, has under 20,000 regular residents.

Paying attention to signage and other motorists is helpful when dealing with roundabouts. Here are some guidelines for handling two-lane roundabouts:

• Inner-lane traffic has the right-of-way over outer-lane traffic
• Queue up on the inner lane to enter the roundabout if you’re heading to the far exits
• Queue up on the outer or right lane if you’re exiting quickly 
• Check your mirrors and drive decisively 

Is it worth renting a car in Iceland?

While many of Iceland’s most famous and awe-inspiring sights are accessible by tour bus, renting a car affords travelers freedom of movement. With a rental car, you can stop where and when you want. Considering Iceland’s natural beauty, renting a vehicle is worth it. 

Of course, rental agencies are quick to remind renters that you cannot stop in the middle of the road, as it’s a dangerous practice. Moreover, drivers should keep realistic expectations about the capabilities of their vehicles when planning their routes through the stunning countryside. For instance, many of Iceland’s “F” roads are closed during the winter months and require fording through shallow water when they’re open. It’s easy to get stuck or have an accident if you overestimate your vehicle or abilities.

Considering Iceland’s challenging landscape, I recommend renting an all-wheel drive (AWD) or dedicated four-wheel drive (4WD) vehicle for your adventures. Remember that some vehicles use a “smart” 4WD system and rugged terrain could confuse the onboard computer. Your best ally is an old-school 4WD platform, like that in a Suzuki Jimny or Jeep Wrangler. 

Is driving around Iceland worth it?

Iceland has shifted to a dominantly tourism-focused economy, and the “Ring Road” caters to that fact nicely. Route 1, or Þjóðvegur 1, does a lap around the entire country, with no shortage of natural wonders, volcanoes, hot springs, and beautiful towns to visit. 

Moreover, if you drive with plenty of time, you’ll discover Iceland’s many peninsulas provide fascinating side journeys from the Ring Road. Many incredible locations, like the Snæfellsjökull National Park, require a spirited tangent from the Ring Road. However, in some cases, like with the Seljalandsfoss waterfalls, jaw-dropping sights are just off the main road. 

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