Driving in Iceland as an Australian
In Iceland you drive on the right, the opposite of Australia, so the steering wheel is on the left and you go anticlockwise around roundabouts. Your Australian licence is all you need to drive in Iceland.
Unless signposted otherwise, the limits are 50 km/h in towns and 90 on country roads. Watch for fixed, mobile and average speed cameras. The alcohol limit is 0.02, lower than the 0.05 at home.
Iceland and Australia side by side
The rows in yellow are different from home.
| Rule | Iceland | Australia |
|---|---|---|
| Drive on the | Right | Left |
| Speed units | km/h | km/h |
| Alcohol limit | 0.02 | 0.05 |
| Holding a phone | Banned | Banned |
| Turn on red | No | Only where signposted |
| Unmarked junctions | Traffic from the right | Traffic from the right |
| Roundabouts go | Anticlockwise | Clockwise |
| Daytime headlights | Always on | When visibility is poor |
The rules that catch Australians out
The most important first.
They drive on the right
In Iceland you drive on the right. At home you drive on the left. The steering wheel is on the left, and in a manual car you change gears with your right hand. Habit puts people on the wrong side when they pull out of a car park or turn into a quiet street, so say it out loud for the first day. At junctions, the nearest traffic comes from your left, so look left first.
Single-lane bridges
Many bridges are only one lane wide and carry traffic in both directions, including 26 on the Ring Road. The car closer to the bridge, which reaches it first, has the right of way. Slow down, and if a car is coming the other way, stop and let it cross before you drive on.
Paved roads turn to gravel
Paved roads can suddenly become gravel, and crashes happen when drivers do not slow down for the change. A sign reading Malbik endar warns you. The limit on gravel is 80 km/h. Stones thrown up by passing cars can break windscreens, so slow down when you meet another car.
Blind hills
Blind hills and bends are common, and the two directions are often not separated. The law requires you to drive slowly at blind hills, and bans overtaking and stopping at or near them. Keep right. The warning sign reads Blindhæð, or Blindhæðir where there are several.
Sheep on the road
Sheep, and sometimes horses or cattle, graze beside and on the road, most of all from June to August. Slow down when you see them, because they may run across the road to rejoin their group.
F-roads are for 4x4s and open only in summer
Highland roads with an F before the number are for four-wheel-drive vehicles only, and some need a large or modified 4x4. Hire insurance is void if you take a two-wheel-drive car onto one, and no insurance covers damage while crossing a river. Most open only from late June or early July until mid-September. Closures are strictly enforced with heavy fines.
Off-road driving is banned
Driving off roads and tracks is strictly forbidden. In the highlands it can lead to prosecution, large fines or prison under the Nature Conservation Act. In towns, driving or parking off the road costs ISK 20,000.
Roads close in bad weather
Storms can close roads without warning, in winter and sometimes into June. Check umferdin.is or call 1777 before every drive, and never drive past a closure.
No stopping on the road for photos
Stopping at the roadside to take photos is banned. The law also bans stopping in tunnels, on or under bridges, and at or near blind hills and bends. Drive on to a parking area before you stop.
Two-lane roundabouts
In a two-lane roundabout, the inner lane has priority. If you are in the outer lane, give way to cars leaving from the inner lane. Use the outer lane if you will leave at the first exit, and do not change lanes inside the roundabout. At home you go clockwise.
Drink driving
The blood alcohol limit is 0.02. That's lower than the 0.05 at home. From 0.2 g/L of alcohol in the blood, or 0.1 mg/L in the breath, a driver is treated as unable to drive safely. From 1.2 g/L the driver is treated as unfit to drive.
Pedestrian streets (göngugötur)
Motor vehicles are generally not allowed, with some exemptions. Where: Signposted pedestrian streets in town centres. Watch for pedestrian street signs in town centres, and do not follow a navigation app into one.
Tolls with no booths
The Vaðlaheiðargöng tunnel and the new Ring Road section in Hornafjörður charge tolls. There are no booths. Cameras read the number plate, and you pay online within 24 hours. Vaðlaheiðargöng costs ISK 2,216 for a single trip in a car under 3.5 tonnes. Pay at veggjald.is or tunnel.is in the 24 hours before or after you drive through. If the Vaðlaheiðargöng toll is not paid within 24 hours, a claim goes to the online bank of the vehicle's keeper, which for a hire car is the rental company. Unpaid claims go to debt collection with an extra charge.
6 more rules worth knowing
Strong wind
Strong gusts are frequent in places, and a warning sign reading Sviptivindur marks them. Slow down there and keep both hands on the wheel. Park facing into the wind and hold the door firmly when you open it, because gusts can damage doors. Check whether your hire insurance covers sand and ash storm damage, because standard cover at some companies does not.
Headlights on all the time
Headlights must be on whenever you drive, day and night, all year. The fine is ISK 20,000.
Speed limits
Country roads are 90 km/h here, slower than the 100 km/h at home. The sign with the town's name on it sets the town limit by itself, usually with no speed sign.
What the car must carry
The car must carry child seats. Hire cars should have them, but check before you drive away, because the driver gets the fine.
Priority to the right
At a junction with no signs, signals or road markings, give way to traffic coming from your right, even from a small side street. It's the same rule as at home. Where paths cross at a junction or open area with no signs, give way to the vehicle on your right.
Your Australian licence is enough
With an Australian licence, your own licence is enough. You don't need an International Driving Permit. A licence from outside the EEA is valid if it is printed in Latin letters, which these are. It lets you drive the vehicles your licence covers at home.
Open Iceland in the app, set to an Australian licence, and keep all of this with you offline.
Open it in the appSpeed limits compared with home
The black marks show your limits at home.
Who goes first
Priority to the right
Roundabouts go anticlockwise
Signs that look different from home
Blind hill
The road crosses a hill that hides oncoming traffic. Often the two directions are not separated.
Automatic police camera
An automatic police camera ahead may photograph traffic offences such as speeding.
Recommended speed
The recommended speed for a bend, hill or other hazard ahead. It is always lower than the speed limit.
Give way
Give way to traffic on the road you are joining.
Animals
Animals, often sheep, may be on or beside the road.
No stopping
Stopping and parking are both banned.
Signs you won't know from home
The bridge ahead is only one lane wide and carries traffic in both directions.
The paved surface ends and a gravel road begins.
Your average speed is measured over the section of road that starts here.
The special limit ends, and the general limit for the area applies again.
Strong gusts of wind are frequent on this stretch.
A side road joins ahead. You are on the main road and have priority.
A tunnel ahead.
Parking is allowed here.
You may stop briefly, but you may not park.
Speed cameras
Fixed speed cameras stand beside roads across the country, and a sign warns of automatic police cameras. Average speed checks are signposted where the section starts. Police also photograph speeding drivers at changing spots. Fines reach hire car drivers through the rental company. The police contact the rental company, which must tell them who was driving. The police then send the fine to you. Rental companies add an administration fee, typically ISK 3,000 to 6,000 per fine, and ISK 4,000 at Hertz. Paying within 30 days takes 25 per cent off. Since September 2026 a new regulation lets Iceland exchange vehicle registration data across borders for offences including speeding, red lights, drink driving and phone use, so fines can follow a car registered abroad.
Before you drive
- Your driving licenceThe physical card, not a photo or a digital licence.
- Your passportHire companies and police ask for ID.
- Child seatsChildren must use a seat belt or a child seat suited to their age and size. The fine for a child not in a child seat is ISK 30,000.
- A way to pay the free-flow tollsThe Vaðlaheiðargöng tunnel and the new Ring Road section in Hornafjörður charge tolls. There are no booths. Cameras read the number plate, and you pay online within 24 hours.
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Where Australians drive next
Iceland for drivers from elsewhere
Sources: the official Iceland sources listed on the Iceland guide, checked 15 October 2026.