The Icelandic Transport Authority: Monitoring and inspection
How does a vehicle driving ban work?
Vehicle that has been prohibited fro driving due to it's condition may not drive under its own power until repaired and subjected to revisions (where a conclusion permits driving). Notwithstanding the prohibition on use, trailers may be driven the shortest route to the place of repair and to be examined. A vehicle may also be driven by its own power after the repair has been carried out, the shortest route from the repair site to inspection station. Further information is available here.
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