Car Rental in Algarve, Portugal: Tips for a Smooth Experience

Why should you consider renting a car in Algarve, Portugal?

Because getting around Algarve is a bit complicated. 

It’s not a huge place, but public transport is not the best. You could do it, but I had a hard time figuring out what bus to take from one bus stop to a smaller town. 

I visited the Algarve in February 2023, and getting around was one of the main challenges, but I solved it easily.

I ended up taking a Bolt (same thing as Uber) from Albufeira, where the international bus dropped me, all the way to Armação de Pêra, where my Airbnb was, which cost 16 EUR for 2 people for a 40-minute drive. 

When I booked the Airbnb, I didn’t consider the size of the town and the proximity to bus stations and supermarkets. But I’m glad I didn’t book in an even smaller city. 

I think it’s important to choose a place that still has some locals during winter so it doesn’t feel completely abandoned. 

In that case, it will be even harder to get them by public transport or even by taxi. It’s not impossible, but it limits you a bit more. 

Luckily, there are plenty of options for car rental in Algarve, with many local and international companies. 

My experience renting a car in Algarve, Portugal

Many travellers in Algarve choose to rent a car for the entire duration of their stay. 

If you’re planning to explore around your location, then renting a car is the best option. 

If you’re planning to only drive in the Algarve region, then rent from reputable local agencies with good reviews. Choose one that doesn’t require a deposit and offers good rates. 

In February 2023, I rented from a small local car rental company in Algarve (https://www.autorocha.com/) for about 170 EUR per week. It was a Fiat Panda, which is quite popular in the area, and it was all great. This company has offices in Armação de Pera and Faro. 

Renting from an international car rental company

If you want to drive outside the Algarve region, then you should choose an international company, because they can provide assistance wherever you go and can even drive to Spain. Check out RentalCars for the best option. 

Do know that you will need a credit card in your name to rent a car in Portugal. 

Also, if you plan to drop off the car in a different location and do a road trip in Portugal, which means outside the Algarve area, then renting from an international company is the way to go.

The best place to rent would be the Faro International Airport, where all rental offices are located.

I rented a brand new Hunday i20 for 440 EUR for 18 days from Budget via RentalCars. This was in the Algarve in February 2023.

I do recommend getting the extra insurance from RentalCars when you book your car online because the rates offered by the companies are insane (about 25 EUR per day). 

I didn’t get the insurance, and I was so stressed the entire time. 

Luckily, in the low season, there’s not much traffic, and I’m a really experienced driver.

Generally speaking, locals don’t use signals most of the time (the many roundabouts can drive you insane), and they change lanes quickly, again with no signal. But experienced drivers shouldn’t have any issues driving here. 

Local company vs international company

After renting cars from two different companies, I felt like the local rental company offered a good service, and everything was covered without having to pay for anything extra. The only extra fee is the highway tolls. 

I felt like the big company tried to force me to buy all their extra insurance and other services. As I approached the office, the first thing they did was to try to upsell me.

They offered a BMW for only 25 EUR extra per day. You can imagine that can add up quickly when renting for almost 3 weeks. 

The lady at the office was pretty vehement that I do need the extra “damage excess insurance” if I plan to drive in Lisbon because the city is crowded and the drives are chaotic.

That scared me a bit, but I planned my trip around Lisbon and only drove to the airport in Lisbon. 

I wasn’t crazy about stopping in Lisbon with the rental car because I had already planned to spend 3 days in Lisbon after the drop-off.

I found that driving in Lisbon isn’t that bad, but it all comes down to your experience as a driver. I’ve been driving for more than a decade in Bucharest, which is one of the worst places to drive in Europe. I’m not scared by “crazy traffic”. 

With the international company. I also had to pay upfront for the fuel surcharge was 88 EUR, which is over the local price of gas (the price of the full tank for the specific car I rented, at the time)

They tried to trick me by saying it was cheaper with them and tried to convince me to bring the tank empty. After all, I returned the car with the tank full (which was cheaper than 88 EUR) and got my money back. 

But renting from a big rental company has its benefits: 

• I was able to drive to Spain. I took 2 road trips to the South of Spain, and also made up to Gibraltar (I parked at the border).
• I dropped off the car in a different location. I dropped it off at the Lisbon airport and continued my adventures in Lisbon.
• I was able to ask for an invoice after I returned the car. I need it for accounting purposes. 

Highway toll system in Portugal

The highway tolls in Algarve is something you need to be aware of. 

There are two main highways – the South highway, going from the Spanish border and all the way to the West and the highway to the North (which you will take if you want to drive to Lisbon and then Porto. 

The two highways will charge you for the distance you cover. Here are some costs to keep in mind:

• If you’re driving the entire Algarve highway, from the East (Spanish border) and all the way to the West, along the Algarve coastline, the highway tolls will add up to about 7 EUR. If you drive back, they will charge you again.
• If you’re driving from Algarve to Lisbon, there will be a booth at the beginning, giving you a ticket for entering the highway, and when you exit the highway, you’ll enter the ticket in the booth and pay the displayed prices. In this case, Algarve – Lisbon is about 22 EUR one way.

There are alternatives to the highways, but they will take twice as much time because the roads are narrow and crowded. 

The highway that crosses across the Algarve region has different camera points, which will automatically tax you when you drive by.

For this, your car needs a special device which beeps when you pass by those points. 

The rental car company provides the device and activates it for you. 

The local rental company charged me 5 EUR for renting the device, and then it needed my credit card info to charge the taxes at the end of the rental period.

So it’s up to you where you drive, and then it sums up all the small fees and charges you at the end. 

The big international rental company charged me 1.10 EUR per day for the same device (18 EUR in total) plus the cost of a full tank. 

As with the local company, they charged my debit card at the end with the total amount of highway tolls. 

Driving in Portugal

Driving is safe in Portugal.

Locals tend to use signalling less than what you’re used to, especially in the Algarve region, but you’ll get used to it. 

Algarve has a lot of roundabouts, and drivers must get tired of signalling every time.

But there are plenty of speed traps and cameras, so make sure you don’t speed, especially when driving in villages. 

Parking is free, but some of the cool spots in Algarve have limited parking spots, so you’ll need to go early if you want to go for a hike in the area.

Given the many hills and rough terrain, it might be hard to find a parking spot, especially during high season. 

Generally speaking, parking was also safe; I never felt unsafe. 

I am from the EU, and I only needed my driver’s licence from back home. 

Is car rental in Algarve, Portugal, worth it?

Yes, driving around Algarve is a dream, and there’s no way to access some of the tiny, rocky beaches without a car. 

Even if you’re going as a digital nomad in Portugal, the main digital nomad community is in Lagos, which is a bit far away from the beach.

However, if you want to spend your time in one place, like Faro or Lagos, then renting a car may be a weekend activity to enable you to drive around and discover more.

During the week it might be an issue if you’re staying in the centre of the city, where the parking is an issue. 

I personally love the freedom that comes with renting a car.

I would recommend it if you’re more into a chill vibe, where you book an apartment far away from all the fuss and then only occasionally visit the bigger towns while spending the majority of your time working in the mornings and exploring Algarve in the afternoons.