Paris to Madrid Rental Car

Your biggest issue will be a very high drop-off charge. The French vehicle can not be rented in Spain, meaning they have to drive the car back to France. As you found out, many companies just refuse to do it.

You might look at your itinerary and decide where do you really need a car. Hint, you do not want one in Paris, and the same with Madrid. You might be best off taking the train from Paris to a region you are visiting, rent a car there, do your touring in France, return the car, then take the train to Spain...repeat.

Edit: Just to add, you will want to get an International Drivers Permit (IDP) from AAA. Also read up on the traffic laws, France has quite a few speed cameras, with no "5 MPH over grace" (Or more) like in the US, 1 KmPH over is speeding for the most part. There are also strict rules about stopping on the highway and use of safety vests, plus tolls, special emission zones, and more. Spain has fewer peculiarities, but their own quirks.

We found out the hard way that rental car company ownership is different from country to country. Hertz in Germany is not the same as Hertz in Italy, for example. If you have issues, you could be SOL.

You really should consider renting in France, driving for the French portion of your trip, and returning in France, close to the Spanish border (or a train station). Then take the train into Spain and rent a car there. The fee to rent in one country and return in another can be 1000€, since they gave to return the car to the country where you rented afterwards. It’s not like crossing state lines in the US.

Jason.peel,
What travel4fun and Paul said., Get two separate rentals. The 1000 euro fee is a real thing, plus you will have more hassles than you want or need. Ditto about having a car in the cities.