7 Things I Wish I Knew Before Driving Iceland's Ring Road (As a City Driver)

How do you actually drive in the Land of Ice and Fire?

You’ve probably heard the stories from other tourists - cars stuck in gravel, unexpected repair bills, and a road trip budget shattered by Iceland's high gas prices. As city drivers more used to traffic jams than volcanic landscapes, those stories made us nervous for our first trip.

But we just finished driving the entire Ring Road in the middle of Summer, and the drive was not as scary as we feared, but it is as expensive as we’ve heard. We learned that simple preparation is the key to a fun and stress-free road trip in Iceland.

This guide is for you, the everyday driver planning a summer trip. We’re breaking down the 7 crucial tips for driving in Iceland that we wish we knew, from finding cheap gas to understanding the different road types. Consider this your go-to guide for your self-driving adventure on Iceland’s famous Ring Road and Golden Circle.

#1 Your City Driving Skills Are Enough (Mostly!)

Let’s tackle your biggest worry first. If you can handle city traffic and merge onto a highway, you already have the core skills needed to drive Iceland's Ring Road in the summer!

Iceland drives on the right side of the road. If you're from the UK, Australia, or anywhere that drives on the left, this might feel like a hurdle. But here's the good news - the Ring Road is the perfect place to adjust. The low traffic volume outside of Reykjavik means you can get used to your new driving position without the stress. After a short while, it starts to feel natural.

Navigating in Iceland is also straightforward. The main highway, Route 1, aka Ring Road, is essentially one large loop around the country, making it hard to get lost. We found the road signs in Iceland to be excellent. They use clear, universal symbols for things like gas stations and points of interest, with English text appearing frequently. When paired with an app like Google Maps, getting around was a breeze.

So, why do we say mostly? Because driving in Iceland does have a few unique quirks you won't find in the city. You will encounter things like single-lane bridges and sheep on the road. But these aren’t difficult challenges. You already have the foundation, you just need to learn a few local rules of the road.

#2 2WD vs 4WD for Summer: What to Rent & Why Full Insurance is a Must

This is the million-dollar question for every Iceland car rental. Do you need a big, expensive 4WD? For a summer trip focused on the Ring Road and other main sights, the answer is a clear no.

We rented a 2WD Plug-in Hybrid EV with Zero Car and was given a Hyundai Tuscon. It handled the paved Ring Road and the unpleasant 31km gravel road to Dettifoss with no issues. A 4WD is only necessary if you plan to drive on Iceland's rugged F-roads (more on that later), which are mountain tracks that require a special vehicle. For the average tourist in summer, a standard 2WD car is more than enough and will save you a lot of money on rental fees.

When booking your car, our top tip is to compare prices online and book months in advance. We did this and it locked in a much better price than last-minute rates.

Now, for something that is not optional: full insurance. A quick search on Reddit will show you countless stories from travellers who all say the same thing. Get the full, zero-risk insurance package. Yes, it adds to the daily cost. But common incidents like a stone chip from a passing car or a wind-whipped door getting damaged (a very real risk in Iceland!) can lead to repair bills costing thousands. Paying for full, zero excess insurance gave us complete peace of mind. It's the one upgrade you should not skip.

#3 Iceland's Road Types: A Guide to Paved, Gravel, and F-Roads

One of the most helpful things to understand is that not all roads in Iceland are the same. Luckily, they use a simple numbering system that tells you exactly what to expect.

• Single-Digit Roads (eg. Route 1): Think of these as the main arteries. The Ring Road, Route 1, is the best example. These roads are well-paved, excellently maintained, and easy to drive on. You will spend most of your time on these.

• Double & Triple-Digit Roads (eg. Route 54 or 574): These are secondary or local roads that branch off the main routes. Double-digit roads are mostly paved, while triple-digit roads are often unpaved gravel tracks. You can drive on all of these with a regular 2WD car. The key is to slow down, drive to the conditions, and keep a sharp eye out for large potholes.

• F-Roads (eg. F208): This is the most important category to understand. F-roads are rugged mountain tracks that are only open in the summer. They are unpaved, not regularly maintained, and often involve crossing rivers without bridges. You must have a 4WD vehicle to legally drive on F-roads. Your 2WD rental car is strictly forbidden. If you are not experienced with serious off-road driving, avoid F-roads completely. For a classic Iceland trip, you do not need them to see incredible sights.

#4 Fuelling Up in Iceland: A Guide to Gas Prices, EV Charging, and Saving Money

Let's talk about one of the biggest costs of our trip - fuel. We tried to be clever by renting a PHEV (Plug-in Hybrid), hoping to take advantage of Iceland's cheaper electricity. This turned into our biggest lesson.

When we picked up our Hyundai Tucson, we discovered the rental company did not provide a charging cable. This was a huge problem. As we learned, you cannot assume a public charging station will have the cable you need. Our car required a "Type 2" cable, but some stations are equipped with their own attached cables, like the "CCS2" type found at ON Charging stations.

As drivers with little experience in the world of EV charging, the thought of trying to figure out compatibility issues on the road was too much. Moreover, our car’s battery mileage is only ~55km, we decided to skip charging entirely.

Our advice: PHEVs do not come with charging cable. If you rent an EV, get instructions on how to use the main charging networks. A site like Plugshare is great for finding station locations, but your rental company is your best source for knowing how to actually use them.

Since electricity was not an option for us, we became experts at saving on gas. And you need to be, because gas prices in Iceland are shocking. Here’s how you can cut your fuel bill significantly:

• Use a price-comparison app. The Bensin app was our best friend. It shows you real-time prices so you can find the cheapest station nearby. We regularly found prices that were over 10% cheaper.

• Plan your refuelling stops. Don't just fill up when the tank is empty. Plan to refuel when you are in a town with more options. Costco near Reykjavik has the cheapest gas in town.

• Use the discount tag. Our rental from Zerocar included a keychain tag for ÓB/Olís stations that gave us a 7kr discount per litre. It’s a small saving that adds up over a long trip!

• Bring have a physical credit card. All stations are self-serve and pay-at-the-pump. While most accept contactless payments like Apple Pay, we found one that only took physical credit cards with a PIN. Don't get caught without one.

#5 Iceland's Driving Rules: Parking, Tunnels, and Roundabouts Explained

Beyond the type of road you are on, Iceland has a few specific rules of the road that are crucial for a stress-free drive. Here is what you need to know.

Paying for Parking in Iceland

Assume you have to pay for parking at almost every major tourist attraction and in towns, and you will see signs with reminder to pay. Payment systems can vary. While you can pay on the Parka app, we found it was often easier and cheaper to pay directly at the kiosk in the parking lot. The Parka app charges an 89kr transaction fee, which can add up, and not all lots are on the app anyway. Paying at the kiosk is simple and direct, and we always choose the option to have the receipt emailed to us.

The One Toll Road You Will Pass in Ring Road

There is only one toll road in Iceland - the Vaðlaheiðargöng tunnel in the north, near Akureyri. It costs 2,152kr for a standard car to pass through one-way. Toll payment is online only via tunnel.is and must be paid 24 hours before or after you drive through the tunnel. If you forget, the bill gets sent to your rental company with a hefty processing fee attached.

Iceland Roundabout Rule

This is a big one. In Icelandic multi-lane roundabouts, the car on the left has the right of way. This is the opposite of many other countries. Always yield to traffic exiting from the left lane to avoid an accident.

Iceland Speed Limits & Road Signs

Iceland takes its speed limits seriously, and fines are high. Pay close attention to the signs. You will find they are clear and use easy-to-understand symbols for things like one-lane bridges or no overtaking zones. Finally, if you see animals, especially sheep, near the road, slow down. If they start to cross, you must stop and let them pass. We had this happen several times, and it's a lovely part of the Icelandic driving experience.

#6 The Real Cost of Driving Iceland's Ring Road: Our Full Breakdown

What does it actually cost to drive around Iceland in the summer? We tracked every single krona (ISK/kr) related to our car to give you a realistic budget.

As mentioned, we were unable to charge our Hyundai Tucson PHEV, so these numbers reflect running on gasoline only. This also meant our fuel economy was worse than expect from a hybrid 😢.

Here is our exact cost breakdown for an 8-day road trip:

• Distance Driven: 1,889 km (1,174 miles)

• PHEV Car Rental Cost: 125,798 ISK

• Gasoline Cost: 41,045 ISK

• Parking Fees at Attractions: 12,202 ISK

• Vaðlaheiðargöng Tunnel Toll: 2,152 ISK

Grand Total Driving Cost: 181,197 ISK (~US$1,439)

We pumped a total of 138 litres of gasoline at an average price of 297.5kr per litre. This gave us a fuel efficiency of about 13.7 km/litre (or 32 miles per gallon). Honestly, we were disappointed with this mileage and believe a standard gasoline car might have performed similarly.

This breakdown shows that while the car rental itself is the largest expense, fuel and parking are significant costs that you must budget for. Planning for these extra expenses is key to keeping your Iceland road trip on budget.

#7 Final Tips for Safe Driving in Iceland

By now you have the right car, you know the rules, and you have a realistic budget. Before you hit the road, safetravel.is has 12 driving tips and here are our additional tips to make your journey smooth and safe.

• Document Your Rental Car. Before you even leave the rental lot, take photos and a video of the car's entire exterior and interior. Do the same thing when you return it. This is your proof against any potential damage claims.

• Embrace Offline Maps. The eSIM we bought worked superbly. However, there were inevitable parts with no mobile connection. Before your trip, download an offline map of Iceland in Google Maps. It works brilliantly for directions, finding gas stations, and even gives you a heads-up for speed cameras.

• Check the Official Websites Daily. Before you set off each morning, check road.is for any road closures or warnings and vedur.is for the weather forecast. We didn’t need to install the app. The only apps we used for driving were Google Maps, Bensin, and Parka.

• Never Stop on the Road for Photos. You will see something amazing and be tempted to stop right there. Don't do it. It is incredibly dangerous on Iceland's narrow roads. Always find a designated pull-off area or parking lot to safely admire the view.

Now that you know how to tackle the drive, the next step is planning where you'll go. For our complete itinerary, including must-see sights, hidden gems, and timings, be sure to subscribe and be notified about our upcoming post.

One final, crucial piece of advice: book everything far in advance. Summer is peak season in Iceland. To secure the car you want and get the best prices on accommodation, you should plan and book at least 6 months ahead. The best options get snapped up quickly.

Planning ahead is the key to a stress-free trip. It means you can forget the logistics and simply enjoy the freedom of the open road, knowing your adventure in the Land of Ice and Fire is all sorted.

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