Egilsstadir is a town in north eastern Iceland.
Being the farest town from Reykjavik and still pretty small as any other town in Iceland the traffic is very low and quite local, though lots of tourist that are making the "circle" of the island along the N1 will probably give you a long ride.
Going East towards Akureyri
Beware cause you will cross the only part of the island where the road N1 doensn't follow the coast and cross the inner mountainous part. Though the scenery it's incredibly lunar and amazing, the wheather and condition can be so much tougher and unpredictable than the rest of the country, carry proper gear and check wheather conditions - locals' advice.
Accommodation and Sleep
As any small town surrounded by wood you won't have any difficulty to find a nice spot to wild camp. In autumn there will be also plenty of berries around!
Other useful info
To keep going south to catch Hofn and the southern ring road N1 is better to pass by the smaller road 939 directly to Djupivogur instead of following the coast and the N1. It is mountainous and smaller but the scenery it's defintely incredible and the traffic is not lower than the other. Beware of not getting stuck in the mountains.