The vast majority of destinations in Iceland offer free parking, and you can drive without worrying about paying any parking fees or road tolls. However, there are some places where the fee is mandatory, and sometimes travelers forget to look around to see if they parked in a paid parking spot. Generally, you can expect to pay in such places as national parks (Skaftafell or Thingvellir), downtown Reykjavik, and some most popular destinations, such as the Geldingardalir (Fagradalsfjall) volcano and Seljandarfoss waterfall. As for the road tolls, there is only one tunnel in the North that collects parking fees.
In downtown Reykjavik, there are four parking zones – P1 (red), P2 (blue), P3 (green), and P4 (yellow). Parking is free in the evenings and on Sundays.
The easiest way to pay for parking is through the Parka app (Download: Google Play | App Store)or website parka.is
On top of on-street parking, you will also find a few parking garages, all connected to the Parka app (Essential apps for traveling in Iceland).
The second biggest town in Iceland implemented a new parking system a few years back. Parking is free, but in some places, you can only stay from 15 min to 2 hours on weekdays from 10:00 until 16:00.
Colors represent different limitations or no limits. In the blue zone, parking is allowed for 2 hours, pink for 1 hour, brown for 15 minutes. Dark green is without time restriction, and other colors are for restrictions or limits, such as prepaid parking, disability parking, and so on. Please note the zones can be changed, so always check the signs in the parking lot.
There are no fees, but the driver must display the arrival time in your windshield/dashboard. You can get clock cards for free at many public places in Akureyri, for example, banks, info centers, gas stations, shops, hotels, etc. But they are mandatory. You can simply write the time of arrival on any piece of paper and leave it on your dashboard/windshield, where it can be easily seen.
You risk getting a fine if you fail to do so, exceed the maximum parking time, or try to cheat by indicating the wrong arrival time.
As I mentioned, most parking next to tourist destinations is free. However, we strongly advise you to always look around for any signs indicating any fees. As Iceland builds more infrastructure and service houses, sometimes the landowners choose to collect fees for maintenance. You can pay with bank cards, or through a special website. For example, places like Fagradalsfjall volcano, Skaftafell, Reykjanes lighthouse uses the Parka app, but there are also payment booths in the parking lots.
Some places still run on the honor system, and you will find boxes for cash to pay for facilities on site. It is probably the only place you won’t be able to pay with your card, so it is good to have some cash or coins.
The Vadlaheidi Tunnel, located near Akureyri in North Iceland, is a 7.5 km (4.7 miles) long tunnel on the Ring Road. It goes through the Vikurskard Mountain Passage, which is dangerous for driving in bad weather. The payment system for the only road toll often confuses people. There are no booths where you will be charged; you can only pay online at the tunnel.is You have 24 hours to pay the fee. If the weather is good, you can avoid the fee and take the mountain road. But make sure the road is passable (check road.is for conditions).
If you fail to pay, you risk getting a fine on top of a missing parking ticket. The authorities will contact you or the rental company, and you will be charged on your credit card. So, if you notice some charge after your trip, it is most likely a parking fee. You are always welcome to inquire via email to confirm.