Yes, in agreeing with the others, daylight is limited at that time of the year and parts of the Ring Road (the road that goes around Iceland) can be treacherous at night. Also, towns maintain the road, not a general Dept. Of Transportation type of thing. There is NO guarantee that the entire road will be passable w/out a 4X. Bus is the best way if you feel you must travel it. Having been stuck on the Ring Road outside of Egilsstadir with a flat tire and no road service (it was the Thursday before Easter, so EVERYTHING was shut down), help was limited to VERY friendly farm people. But this is not always the case.

Lights are best anywhere away from cities. I used to go to a little town by Keflavik, called Hafnir, to catch some beautiful pink auroras.