Rental cars give you a lot of freedom, except in cities which have high parking charges or good public transit. My experience? Use public transit in London, Edinburgh, Rome, New York, San Francisco New Orleans, anywhere on the Amalfi Coast, absolutely use transit in Naples where the bikes and scooter drivers are insane, and most other cities. We always rent a small car, because, at least in Europe, fuel prices are very high.
Tip: If the public transit system has a downloadable transit map with routes shown, and a clear description of passes, schedules etc. and lots of routes, then do not rent a car. Your wallet will thank you for it.
Tip: Book well in advance. Most rental agreements can be cancelled a few days in advance with no penalty.
Tip: Read the "rules and regulations" before you rent a car online. A few minutes of this will bore you to tears, but it will be worth it. Note that some companies will not rent to you over a certain age, or they will charge a premium on seniors. Others only charge extra for under 25's.
Tip: automatic transmission cars cost a lot more to rent, however, if you can't drive standard, don't expect to rent one and learn while you are touring. If you are not used to driving on the left hand side, you have enough to worry about. Even I, raised on the left hand side of the road, had to constantly remind myself which side to drive on...
Tip: pull your camera out, and take lots of pictures of the car and the rental building and make sure the date feature on your camera is turned on, before you drive away - especially if there is existing damage to the car, and make sure they acknowledge that damage by signing the damage report that you completed. It pays to be suspicious of some of the rental car dealers, so let them see you taking pictures: it may keep them honest, even if (like my most recent rental) they don't like it. Ironically, in all cases, I have never seen them do more than a cursory examination of the vehicle when I returned it.
Tip: if there are just two of you, a compact economy car is probably all you need for you and your luggage. Avoid two door cars, which are way too small for you or your luggage.
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