DRIVING IN ITALY
Driving in Italy does not have the appeal of the open road as does driving in the US. There is a speed limit, there are lots of televox cameras (police camers) in the cities and urban areas, gas is expensive and all autostrada are pay or toll roads. Add in the cost of parking in the city, the congestion, possibility of accident and just the added stress of dealing with the worry of getting the car I do not advise people to rent a car. The public system is very good and if you want to explore the smaller reaches of the country do so by bicycle or foot.
But if you do decide to use a rental car here are some tips on renting a car in Italy.
Book from home. Don't wait until you're over there to rent a vehicle. It is invariably cheaper to rent a car from the United States. Most major European rental agencies are now part of, or affiliated with, the big U.S. agencies (Hertz, Avis, etc.), so going direct to the Italian ones doesn't yield a better deal.
Use an aggregator to determine a base fare. Research the going retail rates at various major rental outfits, booking sites, discounters, and travel agencies by using a meta–search engine called an aggregator: RentalCars.com , AutoSlash.com, Momondo.com, Vayama.com , Kayak.com, DoHop.com, Mobissimo.com. Then see if you can beat them with a consolidator (next step).
See if a consolidator can beat those prices. Auto Europe (www.autoeurope.com) - offers consistently lower prices than the Big Five, Auto Europe actually works a bit like an airfare consolidator, so you still pick up the car at some local European office of, say, Avis or Euro car...you just end up paying less for it. This is almost always my first choice when I need to rent, and since they now do leases as well, it's the best one-stop-price-shopping for the best option.
Always get the full rate. Rental companies love to stick it to you with low initial per-day rates, and then add on all sorts of bells-and-whistles at the last moment (insurances, taxes, road fees, one-way charges to pick up in one city and drop of in another, etc.). Italy has an annoying law that require you to buy the CDW (collision damage waver) and TP (theft protection) from the car rental company. You just have to suck that one up. Also, don't forget to inspect the car before you drive off. If any pre-existing nicks, scratches, dents, or other damage is not indicated and initialled by a local employee on your rental form before you leave, you will be liable for it when you return the vehicle.
Don't rent more than you need. We're talking both the time you'll need the car, and the kind of car you'll need. First, rent for as short a period as possible. Don't rent a car for the full two weeks if you're spending your first four days in Rome. You don't need a car in Rome (driving is insane, parking impossible to find, and garages expensive). In fact, you don't need (or want) a car in any major city: Naples, Florence, Milan, Palermo, Genoa—and you literally can't drive one in Venice. Public transport in cities is fast, efficient, and cheap. Arrange to connect major cities by train, and just rent the car for the shorter period when it is truly useful (hill towns of Tuscany & Umbria, say, or exploring Sicily or Apulia). Second, don't rent more than you need when it comes to the car itself. A smaller car will give you better gas mileage, cutting down costs (and make it easier to navigate the winding road and narrow streets). If you can drive a manual, stick-shift is always cheaper than automatic (and also gives better gas mileage).
Forget driving in cities. Most cities now have constricted traffic zones and without proper authorization you are subject to a fine.
Look into short-term leases. If you're renting a car for 17 days or longer, look into a short-term lease. All things being equal, this will usually cost less than a similar rental (especially as the period gets longer; at 30 days or more, only a fool would rent rather than leasing), plus it comes with all insurances, no deductible, and a brand new car.
Consider a rail-and-drive pass. Just need a car for a few days of a longer trip (such as to tour the Tuscan hill towns in the middle of a longer trip spent taking trains between the big cities)? Look into the Italy Rail n' Drive Pass that get you several days of unlimited rail travel along with several days of car rental. You can add car days as needed to customize the pass to fit your schedule.
Follow all driving rules and regulations and road signs. OK, so everybody else speeds in Italy. Doesn't mean you should. You should drive defensively and cautiously. Yes, Italian drivers are aggressive. Do not attempt to imitate them. Obey all no-parking signs. Italian cops have gotten brutal about ticketing (and even towing) illegally parked cars (and any unpaid tickets will find their way to you via the car rental agency, which will attach a fee for their troubles, along with the probable late penalties on the ticket itself).
Useful Italian phrases for car travel
car - automobile (ow-toh-MO-bee-lay)
gas - benzina (ben-ZEE-nah)
diesel - gasolio (gah-ZOH-lee-oh) / diesel (DEE-zell)
Fill it up, please - al pieno, per favore (ahl pee-YAY-noh, pair fa-VOHR-ray)
Where is... - Dov'é (doh-VAY)
...the highway - l'autostrada (lout-oh-STRA-dah)
...the road for Rome - la strada per Roma (lah STRA-dah pair RO-mah)
to the right - à destra (ah DEH-strah)
to the left - à sinistra (ah see-NEEST-trah)
straight ahead - diritto (dee-REE-toh) / avanti (ah-VAHN-tee)
keep going straight - sempre diritto (SEM-pray dee-REE-toh)