Besides, wherever you go, there are different rules for different roads. Speed limits, tolls, and lanes change all over the place.
You can absolutely drive in Iceland! You just do not have to. Whether or not you drive in Iceland also depends on what your goals are for your Iceland trip.
This includes renting from a rental place in Reykjavik, even though it is about 45 minutes away from Keflavik. It is the closest big city.
A lot of the rental companies offer both options, so an automatic car is not hard to find.
Unlike some other countries, all of Iceland’s speed limits are relatively low. This is about 56 m/h for all the USA folks.
F-roads tend to be more rural, H-roads are also rural but better maintained, and circling most of the country is the famous Ring Road.