The Icelandic Transport Authority: Registrations
Where do I get the "out of circulation" ticket for a car/vehicle?
Cars/Vehicles may be temporarily withdrawn from circulation with a ticket, in which case a label bearing the words Notkun bönnuð (Use prohibited) is taped over the inspection label on the license plate, please see: https://island.is/en/skra-okutaeki-ur-umferd
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