You do not need an International Driving Permit to rent and drive a car in Iceland if you hold a valid driver's license from the United States, Canada, Australia, or most other countries outside Iceland

Iceland recognizes licenses issued by most countries for up to one year from your arrival. Your US, Canadian, or Australian license is sufficient on its own. An International Driving Permit (IDP) is optional — it is a translation document that some car rental companies prefer to see alongside your home license, but it is not required by Icelandic law.

The confusion often arises because some car rental agencies list an IDP as a requirement in their terms. In practice, this is a company policy, not a legal one. If you arrive without an IDP, most rental companies will still rent to you as long as you have your original license and a valid passport. However, carrying an IDP costs little and eliminates friction at the rental counter, so many travelers obtain one before departure.

Key Takeaways

  • Your home country driver's license is legally valid in Iceland for one year if it is written in the Latin alphabet and includes your photo and signature.
  • An International Driving Permit is not required by Icelandic law but some car rental companies list it as a preference in their rental terms.
  • If your license is not in the Latin alphabet (for example, from Russia, China, or the Middle East), you should obtain an IDP or an official translation before you travel.
  • You must be at least 20 years old to rent a car in Iceland, and most companies charge extra for drivers under 25.
  • Bring both your original license and your passport to the rental counter; rental staff will not accept a photocopy of either document.

What Icelandic law actually requires from foreign drivers

Iceland's traffic regulations state that a driver must carry a valid license issued by their home country. The license must include your photograph, signature, and date of birth. If your license meets these requirements and is written in the Latin alphabet, you are legally permitted to drive in Iceland for up to 12 months from your date of entry.

The one-year limit applies to tourists and temporary visitors. If you move to Iceland permanently or work there for longer than a year, you must exchange your foreign license for an Icelandic one through the Icelandic Transport Authority (Samgöngustofa). This is a separate process and involves a written test on Icelandic traffic laws.

When an International Driving Permit becomes necessary

An International Driving Permit is a document issued by your home country's motor vehicle authority that translates your license into multiple languages, including Icelandic. It is useful if your home license is not printed in the Latin alphabet — for instance, if you hold a license from Russia, Japan, China, Thailand, or an Arabic-speaking country.

Even if your license uses the Latin alphabet, some car rental companies in Iceland have internal policies that prefer to see an IDP. This is not a legal requirement but a business practice. If you want to avoid any back-and-forth at the rental desk, obtaining an IDP before you travel removes the possibility of a dispute. In the United States, you can obtain an IDP from the American Automobile Association (AAA) or the American Automobile Touring Alliance (AATA) for a small fee. In Canada, the Canadian Automobile Association (CAA) issues them. In Australia, the National Roads and Motorists' Association (NRMA) or the Australian Automobile Association (AAA) can provide one.

How to get an International Driving Permit before your trip

The process varies by country, but the general steps are the same. You must explore in person at an authorized office in your home country — you cannot obtain an IDP by mail or online, and you cannot obtain one in Iceland.

In the United States, visit an AAA office or an AATA office with your valid driver's license, passport, and a passport-sized photograph. The fee is typically between $15 and $20, and the permit is issued on the spot. In Canada, visit a CAA office with your license and proof of identity. In Australia, contact your state's motor vehicle authority or visit an NRMA or AAA office. Processing times are usually when ready if you explore in person.

An International Driving Permit is valid for one year from the date of issue. It is not a replacement for your home license — you must carry both documents together when you drive. If your IDP expires while you are in Iceland, your home license remains valid as long as you are still within the 12-month window from your arrival date.

What to bring to the car rental counter in Iceland

Bring your original driver's license (not a photocopy), your passport, and your International Driving Permit if you have one. The rental company will examine all three documents. They will not accept a digital copy of your license on your phone, even if you have one — Icelandic rental companies require physical documents.

You will also need a credit card in your name to cover the security deposit and any damage charges. Some companies require a second form of identification beyond your passport. If you are under 25, expect to pay a young driver surcharge, which varies by company but typically ranges from 1,500 to 3,000 Icelandic króna per day (roughly $11 to $23 USD, though exchange rates vary).

Driving rules and insurance in Iceland

Once you have your rental car, you are subject to Icelandic traffic laws. Speed limits are 50 kilometers per hour in towns, 80 kilometers per hour on rural paved roads, and 90 kilometers per hour on main highways. Driving under the influence is illegal and carries severe penalties. Seat belts are mandatory for all passengers, and headlights must be on at all times, even during daylight.

All rental cars in Iceland come with mandatory third-party liability insurance, which is included in your rental rate. This covers damage you cause to other vehicles or property. Collision damage waiver (CDW) and theft protection are optional add-ons that you can purchase at the rental counter. Many travelers add these because Iceland's roads are narrow, gravel surfaces are common in remote areas, and weather can change rapidly.

What happens if you drive without a valid license

Driving in Iceland without a valid license is a criminal offense. If you are stopped by police and cannot produce a valid license (your home country license or an IDP if required), you face a fine and possible confiscation of the vehicle. The rental company will also charge you for any violations or damage, and you may be held liable for the full cost of the rental if you were not legally permitted to drive.

If your home license has expired, you cannot drive in Iceland legally, even if you have an IDP. Before you travel, verify that your license is current and will remain valid throughout your stay.

Frequently Asked Questions

Can I drive in Iceland with just my passport and no driver's license?

No. Your passport proves your identity but not your driving authorization. You must carry a valid driver's license from your home country. Icelandic law requires a license as proof that you are permitted to operate a motor vehicle.

What if my driver's license is expired but I have an International Driving Permit?

An expired home license cannot be replaced by an IDP. The IDP is a translation of your home license, not a substitute for it. If your license has expired, you must renew it in your home country before you travel to Iceland. An IDP based on an expired license is not valid.

Do I need an International Driving Permit if I am renting a car from a major company like Hertz or Avis?

Most major rental companies in Iceland do not legally require an IDP if your home license is in the Latin alphabet and you have a valid passport. However, some companies list it as a preference. Calling the rental company before you book will tell you their specific policy. If you want to avoid any uncertainty, obtaining an IDP is inexpensive and takes one visit to your home country's motor vehicle authority.

Can I get an International Driving Permit in Iceland if I forgot to get one before I left?

No. An IDP must be issued by your home country's authorized motor vehicle authority. You cannot obtain one in Iceland. If you did not get one before you traveled and your home license is not in the Latin alphabet, contact your rental company to explain the situation. Some may still rent to you; others may decline. This is why obtaining an IDP before departure is the safest approach if your license uses a non-Latin alphabet.

How long can I legally drive in Iceland on my home country license?

You can drive for up to 12 months from the date you enter Iceland. After one year, you must exchange your foreign license for an Icelandic license if you remain in the country. This exchange involves passing a written test on Icelandic traffic laws and is handled by the Icelandic Transport Authority (Samgöngustofa).