Portugal Roadtrip Tips: Everything We Learned about Renting a Car & Driving from Lisbon to the Algarve

Lisbon Portugal Postcard

The first European stop on our round-the-world trip was Portugal, the gateway to Europe. After a lovely few days in Lisbon, we rented a car and took a Portuguese roadtrip from Lisbon to The Algarve.  The Algarve is a region in the South of Portugal, made up of small towns and cities — like Lagos, Portomao, and Faro — all along the Atlantic Ocean. Because of its resorts and beaches, the Algarve region is a super popular vacation hotspot for the rest of Portugal, Europe, and international vacationers too!

If we were to bus to The Algarve region (say, from Lisbon to Faro) we felt like we would be confined to a single town as our destination.  We rented a car to give ourselves more freedom and flexibility to stop in smaller towns and check out different parts of the Atlantic coastline.

How Much Does it Cost to Rent a Car in Portugal?

We booked our Portugal car rental online with Enterprise Rent-a-Car / Guerin Car Rental Solutions. The daily cost of our vehicle — a Toyota Yaris — was very reasonable. However, the low upfront cost of the vehicle rental is supplemented with a plethora of upsells, add-ons, and extra charges.  We paid €176.63 for our 5-day car rental, which works out to be €35.32 per day to the car rental company.

  • €14.64 x 5 – daily charge for 5 days (which includes a Via Verde device rental for toll booths)
  • €65.04 – different location drop-off
  • €6.38 – toll road charges
  • €32.00 – tax

We also paid a total of €65.00 (€40.00 for a full tank) for fuel on our 5-day road trip.

Sagres, Portugal
Sagres, Portugal: Renting a car in Portugal gave us more freedom and flexibility to stop in smaller towns and check out different parts of the Atlantic coastline.
From our 5-day roadtrip from Lisbon to The Algarve, Here’s everything we learned about renting a car and driving in Portugal from Lisbon to the Algarve.

Booking a Rental Car in Portugal

We booked our car rental in Portugal online with Enterprise Rent-a-Car / Guerin Car Rental Solutions.
  • Pre-Book Your Vehicle Online: Pre-booking your vehicle online should save you money compared showing up to a random rental agency and booking on the spot.
  • Don’t Rent a Car for Driving in Lisbon: Lisbon is super easy to get around by public transit or on foot. I don’t recommend renting a car for Lisbon city. Begin your car rental when you start your roadtrip out of Lisbon.
  • The Lisbon Airport Has the Best Selection of Vehicles: The airport had the best selection of vehicles and car rental companies. Although it seems out of the way, it’s only €1.45 to take the metro to the airport from the city.
  • Size matters: The bigger or more premium the vehicle, the higher the cost. There was no way we could cram our two backpacks into a two-seater smart car so we opted with the next size up, a Toyota Yaris.
  • Note Down Every Ding and Scratch on the Car: To be extra cautious we took photos of every little mark on the car in case there was any dispute about who caused the damage at the end of our rental.  I’m happy to report that we had no damage to our vehicle at the end of our rental!
  • Rentals are charged by the 24 hour period: If you return a vehicle after closing hours, your time with the vehicle is bumped to the next day when the rental company opens.
25 de Abril Bridge
We took the 25 de Abril Bridge out of Lisbon at the start of our Lisbon to Algarve roadtrip

Car Rental Surcharges in Portugal

To me it’s super important to understand potential extra charges (especially since our trip to Portugal started off with an unexpected $240 baggage charge on TAP airlines) so we can make a calculated decision to accept or avoid them. To keep your car-rental costs low, be aware of these common surcharges:
  • We Said No to Extra Insurance: In case of damage to your vehicle, the extra insurance brings down the cost of your deductible.  However, we didn’t think the extra daily charge (which was nearly as much as the car rental) was worth the additional coverage.  That’s our personal choice and the risk we were willing to take.
  • We Said No to In-Car Wifi and a GPS System: Using the free app maps.me on our phones, we could download maps and use them offline.  There was no need for us to pay extra for in-car wifi or a GPS System.
  • Dropping a Car Off in a Different Location Has a Surcharge: We began our rental in Lisbon, and dropped off at the airport in Faro. For us, the fee was €80 to drop the vehicle off in a different location. Despite the high cost, we did this anyway because our next stop was into Seville, Spain, and we didn’t want to backtrack on our journey.
  • Driving into a different country has a surcharge: Crossing from The Algarve into Spain (ie. Seville) is a common route for travellers to take.  Be aware that crossing the border in your rental vehicle will likely incur extra fees. For the company we rented with, the charge is €50.  If you don’t tell them in advance there’s an additional charge that’s based on mileage Will they catch you breaking the rules and crossing the border? We were told that most of the vehicles are equipped with a GPS system to track for theft, so with they same system they can check if you’ve crossed the border.
  • Fuel Up Before Returning Your Car Rental: if you don’t return the vehicle with a full tank, you pay their rate for fuel, as well as an extra charge for re-fueling. Best to fuel up before returning — we paid about €50 for a full tank for a Toyota Yaris.  Also, the car rental company you book with. may have discounts at specific gas station companies. For us, through Enterprise, we received a very small discount at the gas station Galp.

car rental portugal roadtrip algarves toyota yaris

Highway Driving and Portuguese Toll Roads:

Portugal has a lot of toll roads! The toll roads are divided into small segments which all have different charges — anywhere from €0,45 to €4,35 if you’re driving the A22 in the South.  Little costs add up, so if you’re not in a rush, it’s best to avoid toll roads whenever possible.  Our total toll charge was €6.38 Euros, which was surprisingly low.  I think it was because we checked out a few coastal towns along the way, which led us to drive on smaller roads rather than the toll highways.
For planning assistance, the website portugaltolls.com offers some insight on how much you may expect to pay on various highways in Portugal.
  • Toll Booths are Electronic: There’s no one physically at the toll booth to take your money.  As a result, if you cross a toll road, your licence plate is captured and you are expected to pay the charge later on…possibly by postal mail?  It sounded inefficient and complicated so we rented a Via Verde electronic device instead.
  • Rent a “Via Verde” Device: We rented a little electronic device called a “Via Verde” which automatically deducts the toll charges.  We then paid the charges to the car rental company at the end of our trip.
  • Avoid the A22 Toll Road and Take the N125 Instead: When you’re driving to/from East – West along the South of Portugal, AVOID THE A22 highway. Take the N125 instead. Road signs seem to favour leading you on the A22, but we always tried to take the N125 instead. On a map you can see that the highways run parallel to each other. Especially if you’re making many stops on the coastal towns, the N125 is closer to the coast than the A22.
Algarve Toll Road Map
Algarve Toll Road Map from portugaltolls.com

Driving in Portuguese Towns: 

Everything I love about exploring little Portuguese towns (pedestrian-friendly walkways, picturesque narrow alleyways, cobblestone streets, etc) — makes it awfully difficult to drive in.
  • Driving In the Historical Town Centres of Portugal  is not easy: There are a lot of narrow one way streets, tight blind turns and very narrow streets. It’s best to park on the outskirts of the town centre and walk in instead.
  • Be Prepared to Drive in a Lot of Roundabouts: The drivers already in the roundabout have the right of way — be sure to yield to them.
  • There is an Abundance of Free Parking: We didn’t pay for parking once during our road trip!  Every time we saw a paid parking lot, we were able to find some free parking on the side.  However, note that we went to The Algarve in late April, which is before peak tourism season.  Perhaps these free spots will be full during the peak of summer.
  • Close Your Side Mirrors When You Park: This will reduce the chance of someone scraping your car as they drive by on a narrow street.
  • Consider Staying Outside the Main Town: In Lagos, we stayed at an apartment rental which had a slightly lower rating — but upon reading the feedback from other travellers, the only downside seemed to be that the apartment was further away from the beach and main town. It worked out in our favour because parking was free and easy, and with our car, we were never more than a few minutes drive away from where we wanted to go in town.
  • Ensure Your Accommodations Offer Parking: Free is best, of course!
Portomao, Portugal
Portomao, Portugal: Everything I love about exploring little Portuguese towns (pedestrian-friendly walkways, picturesque narrow alleyways, cobblestone streets, etc) — makes it awfully difficult to drive in!


Overall, we loved the freedom and flexibility of having a car to explore the Algarve.  We had no issues with Enterprise Rent-a-Car / Guerin Car Rental Solutions and our experience went smoothly.  And although we paid a lot of more than the base rental price of our vehicle, all the extra charges were clearly communicated and listed up front, so we had no surprise fees upon returning the car.


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