For the last few years, Portugal has been on everyone’s hot list. No wonder. It’s a beautiful country, the people are friendly and wine is cheap! We loved both Lisbon and Porto, but a big part of Portugal’s charm is the countryside with its vineyards, olive groves and villages going back to medieval times. We didn’t want to miss any of it and that meant we were renting a car in Portugal.

On a trip that lasted 33 days, we spent nine days in Lisbon, six days in Porto and the other 18 days in the rest of Portugal.

If you’re just going to see Lisbon and/or Porto, you don’t need a car. In fact, we would advise not to get one. There are express trains between the two cities, the local transit systems work well and the rest of the time, you’ll walk. Day trips from Lisbon to Sintra and Cascais (don’t miss them, they’re well worth seeing) can easily be done by regional train.

Our plan was to tour the country in a big circle, starting from Lisbon, driving up the Atlantic coast to Porto with a few stops along the way, then inland through the Douro Valley, down to the south to relax on the Algarve beaches and then back to Lisbon and the airport.

When we told people in Lisbon about visiting Portugal’s countryside, they smiled. “Ah, you’re going to see the real Portugal.” The Portuguese have a romantic attachment to their small towns, likely because they came from one to live in the city.

I read in a few places that you need an International Driver’s License if you’re renting a car in Portugal. I got one at CAA (AAA in the U.S.) for $25.

However, when we rented, they didn’t ask for it. The rules say you should have one, but the Portuguese are well known for thumbing their noses at rules. So, who knows? Better safe than sorry, I guess.

I don’t know why, but if you’re renting a car in Portugal, you’ll find that at least 90% of the cars offered have manual transmissions. They’re obviously much more popular in Europe than North America.

When you’re searching for available cars and prices, be sure to specify automatic in your search criteria if that’s what you want. You’ll see your choices narrow down, and you’ll likely pay a premium. Don’t wait until the last minute because there may not be any automatics left.

Also, rental prices are highly variable when it comes to cars with automatic transmissions, with some companies charging two to five times as much as others. It really pays to shop around.

You’ll see all of the big car rental companies in Portugal, but it seems there are more local ones than you usually find. Again, do your homework. We rented from Cael, a Portuguese family-owned company we’d never heard of. They had good online reviews, and the best price for a VW Golf with an automatic transmission for the dates we wanted. The whole rental experience turned out well – professional, friendly, no hard sell, easy to deal with. We’d rent from them again.

Our VW was perfect for us. We got two suitcases in the trunk, the engine had lots of pick-up for the highways, and most importantly, it squeezed through some of the tiny streets and laneways we navigated in the villages. (A few years ago when we rented a car in Italy, we were given a Volvo SUV. They didn’t have the smaller car we had reserved. This “upgrade” felt like such a whale in the Italian villages.)

A few times we found ourselves laughing in disbelief at the tiny laneways our GPS was directing us to. Surely, we’re not driving up here! But yes indeed, that was the road, cobblestoned, so narrow you could touch the houses out of your windows, and often up a curving hill with blind corners.

In the Douro Valley, the routes through the vineyards rise and fall, twist and turn on narrow roads, often with 90 degree turns, no guardrails and drops of hundreds of feet. Wonderful scenery, if you’re the passenger.

Like manual transmissions, diesel cars are more popular in Europe. Remember that when you fill the tank. Also, many stations have two grades of diesel. Go with the cheaper regular grade. Your rental doesn’t need premium.

Thinking of dropping off your rental at a different location than where you’re picking up? Once more, price shopping pays. For some car rental companies, this seems to be a big deal and you’ll pay a hefty surcharge, even if it’s within the same city. Other companies don’t seem to care so much.

This is where having a premium card pays – our American Express Gold card covered many of the insurance basics. However, on top of that, we did accept the collision damage waiver, meaning we’d be liable to pay up to the first €1,000 in damage.

I’ve never liked buying too much insurance, and we were willing to risk that rather than pay for more insurance. However, your mileage may vary.

By the way, before you commit to renting your car, check that the rental company doesn’t require a letter from your bank as proof that your card covers some of the insurance. It didn’t happen to us in Portugal, but it did in Mexico. We had to switch rental companies on the spot to one that didn’t ask for the letter. It wasn’t fun. If you’d rather be safe than sorry, call your credit card company and ask them for a letter confirming your card’s insurance coverage. They all have them and will email you a PDF to print.

If you’re not used to paying tolls on highways, Portugal might surprise you since most of the big highways have tolls.

Three things to know:

When you rent your car, you’ll be offered a transponder for a small fee (I think ours was €18 for just over three weeks) which means you can whip through the tolls on the green Via Verde lanes and not have to stop. You’ll pay for your tolls when you turn in the car. Take the transponder. It was worth it not having to stop and line-up in the other lanes. Driving all over the country, we paid about €92 for tolls plus the €18.

Secondly, you don’t have drive on the toll highways. There are secondary roads that will take you where you’re going, but much more slowly. Many of them are crowded, because they become the main street of every little village along the way. Since the Portuguese are thrifty, they like driving toll-free on  the old roads.

Lastly, the highways are built for drivers. Hardly any traffic (it was a bit spooky actually), beautifully engineered, an official speed limit of 120 kmh (75 mph), with some cars passing you at 140 – 160 kmh (87 – 100 mph). With no visible police or radar, this didn’t seem to be a problem. The Portuguese are generally good drivers, polite and not aggressive like in other countries that shall remain unnamed (Italy, Germany).

You’ll get incredible vistas of vineyards, olive orchards and fields of cork trees. Sometimes you’ll go for miles without seeing a house or building. It was fun just driving the highways.

Oh, and the bridges. Jaw-dropping spectacular. Portugal is a nation of hills and gorges, so you’ll be driving over picture-book bridges. More than once we were tempted to get off the highway and down into the valley to take pictures of the bridge.

The signs on the highways are very well done. For every exit, you’ll get multiple notices, as far away as 5 kilometres and more as you’re getting closer to the turn off. So, you don’t need a GPS there, but as soon as you get into a town, you’ll be lost without it (even with it sometimes).

We rented a Teppy for portable WiFi which allowed us to use Google maps on our phone without data charges. The Teppy was also perfect for any online work we were doing on the road. Email, web updates, social media… Worked perfectly.

Whether you have a phone plan that will cover your data, your own GPS or rent something like a Teppy, we think a GPS is a must.

Parking in Portugal was an eye-opener. In many places, they have public lots that are free. Street parking is generally free. In smaller towns, park wherever you want, out of the way. Don’t block driveways, don’t park where the bus stops, but other than that leave the car wherever you like. It took us a while to realize that there were no meters or ticket machines.

Only when we stayed in Porto did we pay at a parking garage because our Airbnb was on a little cul-de-sac where street parking was by permit for residents only.

In some countries, driving is true horror-show. I just read a blog post about five countries not to drive in. Portugal definitely wasn’t on that list.

Other than downtown Lisbon or Porto, we highly recommend renting a car and seeing the Portuguese villages and countryside. There’s nothing like the freedom of spontaneously pulling into a beach you spotted from the top of a cliff, or heading for a village for lunch and discovering an amazing castle.

Rather than just a means of getting from point A to B, our drives were among the highlights of our trip.

Along with the websites and other travel planning tools, we still like to have one guide book handy. We’ve tried them all, and these days we prefer Lonely Planet books. Although we love paper books, we’ve started buying the digital versions to read on our iPads, which we take with us anyway.

For hotel accommodation, we like Booking.com where we find hotel pages with photos, descriptions and authentic reviews. We always find a great selection, current prices and pages that make booking easy. We used Booking.com for hotels during our Portugal trip. Find hotels in Lisbon,  Porto, and the Algarve region.

We rented Airbnb in Lisbon, Coimbra and Porto. There are wonderful apartments for rent throughout Portugal. If it’s your first time renting Airbnb, click here to get the equivalent of $50 CDN off your first booking.

We started our Portugal month in Lisbon and loved it! Here are 10 Reasons You Should Visit Lisbon Right Now… and yes, one of them is wine.

Are you a Harry Potter fan? Then you’ll want to go to Porto and have a very expensive coffee. Maybe you’ll sit where J.K. Rowling sat…

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