We are planning on spending 1 night in Munich then traveling to Fussen area to see the Newschwanstein Castle, Ehrenburg ruins and Highline 179. We plan on spending the night (poss 2) in that area then traveling to Hallstatt. I am a bit overwhelmed by the transportation in between. We rented a car in France on our last trip and drove into Paris during rush hour traffic so foreign driving does not intimidate us. The issue is that our time is limited and we don't want to pay through the nose for a rental car drop in another country.. After Hallstatt we are bound for Venice, Cinque Terra and Rome. We are not traveling until July so we have some time but we are anxious to get this figured out. I would love you hear your advice on how to manage our ground transportation. THANK YOU!!!!
Here is my suggestion. From Munich take a train to Innsbruck and rent a car there. Since you rent it in Austria, it will come with an Austrian vignette. It is not too far from there to Fuessen and the castles. Then drive to Hallstatt. From Hallstatt, drive to Villach and turn the car in and then take the OEBB bus to Venice (departs 10:50). Use trains for the rest of the trip as cars will not do you much good in Venice, Cinque Terre or Rome.
Edit- There is also an EC train from Klagenfurt at 10:20 according to the current schedule. There are Hertz locations at both Innsbruck and Klagenfurt stations.
You might want to start by looking at Mapquest or Googlemaps to get familiar with the territory.
Fussen is southwest of Munich. Hallstadt is on the other side of Salzburg--to the south.
Distances between these places are farther than they look on a map.
Most enter Italy through the Brenner Pass--just south of Innsbruck which is 2 hrs. south of Munich.
We are going to do something like this in early September. We are starting in Munich and going throughout Austria ( Innsbruck, Salzburg, Vienna via Hallstatt). We had originally planned to train from Munich to Innsbruck and rent car there to save the 200 Euro drop of fee in Vienna. But then we are doing what you are doing, going back where we just took train through to check out castles, Ga-Pa, etc before coming back to Innsbruck that night. We discovered that cost of train was close to $50 for both of us total, takes 2 hrs to Innsbruck, then one hour back up to Bavaria so lose at least 2-3 hrs there as driving direct from Munich is only about an hour or slightly more to get to same area. I called to change our rental from Munich rather than Innsbruck and saved $70 by doing this. We decided that the loss of less than 100 Euros after taking the savings of $70 and not having to buy train tickets to Innsbruck made much more sense than the time wasted saving a few bucks. Good luck!!