Driving Iceland’s Coastal Roads: A Guide to Lesser-Known Peninsulas

When travellers dream of driving around Iceland, the Ring Road often takes centre stage — and rightly so. But for those willing to wander beyond the well-trodden route, Iceland’s coastal peninsulas reveal a treasure trove of wild beauty, charming fishing villages, and unforgettable wildlife encounters.

From the seal-inhabited shores of the Vatnsnes Peninsula to the pastel-painted houses of Borgarfjörður Eystri, these roads are less travelled, but every bit as magical. Whether you’re picking up your rental car at Keflavík International Airport (KEF) or setting off from Reykjavík, Höldur’s reliable fleet ensures you can explore these remote gems with comfort, confidence, and care for the environment.

See also: Top Scenic Detours Off Iceland's Ring Road.

---

Why Choose Iceland’s Coastal Peninsulas?

The peninsulas offer:

• Fewer crowds, more connection – Authentic encounters with Icelandic nature and culture.

• Wildlife wonders – From puffins to seals, these coasts teem with life.

• Epic scenery – Rugged cliffs, black sand beaches, sweeping Arctic horizons.

• Story-rich stops – Local legends and living traditions at every turn.

For self-drive travellers, these areas combine the freedom of the open road with the excitement of the unknown.

---

1. Vatnsnes Peninsula – The Seal Coast of Iceland

Location: Northwest Iceland, between Hunafloi and Miðfjörður bays.

Vatnsnes is a paradise for wildlife enthusiasts and photographers. This rugged stretch is one of the best places in Iceland to see wild seals in their natural habitat. The road around the peninsula is mostly gravel, adding to its off-the-beaten-track charm — perfect for those who’ve opted for a sturdy Höldur rental car.

Highlights:

• Hvítserkur Rock – A striking basalt stack rising from the sea, often likened to a dragon drinking from the waves.

• Icelandic Seal Centre in Hvammstangi – Learn about the local wildlife before heading out to spot them.

• Windswept beaches and panoramic Arctic views.

Driving Tip: The Vatnsnes loop is best explored at a leisurely pace. Expect a mix of paved and gravel sections — easy for most vehicles, but more comfortable in a 4x4 if travelling in early spring or late autumn.

---

2. Borgarfjörður Eystri – Puffin Paradise and Painterly Villages

Location: East Iceland, tucked beyond the fjords.

Borgarfjörður Eystri is renowned for its colourful fishing village, dramatic mountains, and thriving puffin colonies. It’s a longer drive from Reykjavík or KEF, but worth every kilometre. Along the way, you’ll pass through fjord after fjord, each more photogenic than the last.

Highlights:

• Hafnarhólmi Harbour – Possibly the friendliest puffin-viewing spot in Iceland, with safe platforms for up-close encounters.

• Álfaborg ("Elf Rock") – Local folklore claims this hill is home to the Queen of the Elves.

• Coastal hiking trails with views straight out of a painting.

Driving Tip: The approach road includes winding mountain passes — take your time, especially in winter. A reliable, well-maintained rental car is essential here.

---

3. The Arctic Coast Way – Iceland’s Newest Scenic Drive

Launched in 2019, the Arctic Coast Way links over 900 kilometres of northern Icelandic coastline. This route winds through remote fishing villages, black-sand beaches, and wild headlands where the midnight sun and northern lights cast their spell.

It passes near Vatnsnes and continues towards the dramatic Tröllaskagi Peninsula, making it easy to combine with other scenic detours.

Highlights:

• Siglufjörður – Once Iceland’s herring capital, now a picturesque harbour town with a world-class museum.

• Hvammstangi & Skagaströnd – Ideal for culture, cuisine, and coastal walks.

• Arctic wildlife and panoramic sea views at every bend.

Driving Tip: While much of the route is paved, some sections are gravel. Always check local weather and road conditions before setting out.

---

Planning Your Coastal Peninsula Self-Drive

When to Go

• Summer (June–August): Long daylight hours, mild temperatures, and abundant wildlife.

• Spring & Autumn: Fewer tourists, dramatic seasonal colours, and better chances of seeing the northern lights.

• Winter: Magical snowscapes, though some remote roads may be closed.

Best Starting Points

• KEF – Keflavík International Airport: Ideal for international arrivals ready to head north.

• Reykjavík: Perfect if you plan to spend a day or two in the capital before hitting the road.

Vehicle Choice

A compact rental car is fine for summer coastal drives. For shoulder seasons or winter, a 4x4 vehicle provides extra comfort and safety. Höldur offers both, along with eco-friendly options to suit your travel style.

---

Sustainable Travel Along the Coast

At Höldur, our commitment to sustainability means we encourage responsible exploration:

• Stick to marked roads and parking areas to protect fragile coastal vegetation.

• Choose eco-friendly rental vehicles when possible.

• Support local businesses in the small villages you visit.

By travelling consciously, you help preserve the pristine beauty that makes these peninsulas so special.

---

FAQs – Driving Iceland’s Coastal Peninsulas

Do I need a 4x4 to drive the Vatnsnes Peninsula?

Not in summer — a standard car will do. In winter or early spring, a 4x4 is recommended for comfort and safety.

Can I rent a car at Keflavík Airport for a coastal road trip?

Yes. Höldur offers convenient pick-up at KEF and in Reykjavík, making it easy to start your journey right after you land.

Are there fuel stations on these routes?

Fuel stations are limited, so top up when you see one, especially before heading into more remote stretches.

Is the Arctic Coast Way suitable for first-time visitors to Iceland?

Absolutely. While less famous than the Ring Road, it offers spectacular scenery and fewer crowds, with mostly well-maintained roads.

Where can I see puffins on a coastal self-drive?

Borgarfjörður Eystri is one of the best puffin spots, especially from May to early August.

How long should I allow for a Vatnsnes Peninsula trip?

A half-day is enough for the loop itself, but we recommend a full day to enjoy wildlife watching and local stops.

Can I combine these routes with the Ring Road?

Yes. All of these peninsulas can be linked to the Ring Road for a varied and scenic itinerary.

What’s the best time of year for driving Iceland’s coastal peninsulas?

Summer offers the best conditions, but spring and autumn bring unique charms and fewer tourists.

 

Final Thoughts

Exploring Iceland’s lesser-known peninsulas is about slowing down, embracing the unexpected, and letting the road lead you to moments that can’t be found in guidebooks.

Whether you’re watching puffins dive into the sea, tracing the curves of a windswept coastline, or pulling over to photograph an endless Arctic horizon, you’ll feel the essence of Iceland in every mile.

 

 

When you book with Holdur Car Rental you´ll get:

• Our Basic Protection Package. This includes third-party loss.
• Collision damage waiver (CDW)
• Personal Accident Insurance (PAI)
• The option to upgrade your vehicle cover
• -5 ISK Fuel Discount off every liter at N1 gas stations
• Studded Winter Tyres during the snowy season at no additional cost
• Flexible cancellation, with a 100% up to 48 hours prior to pick-up

Plan Your Iceland Road Trip Today

With Höldur, your trusted local travel companion since 1966, you can set out knowing your vehicle is ready for whatever the journey brings — from Reykjavík city streets to the most remote coastal roads.

Your Icelandic adventure awaits — and we’ll make sure the ride is as unforgettable as the destination.

Search for a car!