I'm with the other posters -- forget the car -- and here is why: 1) the car is not helpful within either city, 2) people that age can turn time on a train into social time -- go to the dining car and meet some people, or look for another couple of younger folks and sit in their compartment with them, 3) if you're exhausted you can all three nap on the train, 4) in Italy you can do it cheaper, 5) trains never get lost, 6)... I'll stop now.
I agree with Pat -- you should be able to land a Tb in either city for 75 to 80 Euros -- which is about $105 at current exchange rates. If you want your shower down the hall and will pay cash you can even get as low as 60 Euros ($84) but splitting it three ways you can swing $105 to $115 can't you?
Great link Sharon! I was unfortunately ignorant of that website!
Per person you can sightsee in Rome or Florence for 20 Euros on average and eat for 20 to 25 Euros on average, so call it 42.50 Euros or $60 per person per day at current exchange rates; splitting that Tb room I noted comes up to $90 per person per day.
If you cheapo for breakfast, picnic for lunch, and watch it for dinner you can cut that almost in half -- but it's hard to suggest a budget not knowing what your tastes are like.
When your ages I personally... worked a second job for several months before going to Europe, took my lunch to work at home for a year, mowed the neighbor's grass, clipped coupons, put off buying that pair of shoes, asked relatives for cash (or travel needs) for Christmas, sold old clothes at the thrift store, bought my clothes at the thrift store, turned down friends for that evening out for drinks, didn't see a movie in the theatre for a year, sold my TV, and more just like that... so I could spend that extra $60 per day on my 17 day trip to Germany/Austria/Swizterland when I was 29, my 18 day trip to Italy/Switzerland when I was 30, and my 21 day trip to Swizterland/Austria/Gemany/Holland/Belgium when I was 32.