We have never rented a car before in Italy. How do you find the best rates and can it be done before you leave the U.S.? Also how do you get an international permit and is it preferable to have GPS if driving between small towns in Tuscany?
Use Kayak to find rates.
Get the permit from AAA.
Take your own gps preloaded with European maps.
You should reserve the car ahead for the best chance at getting the features you want, such as the cheapest economy category or something with automatic transmission. Most car rental reservations can be changed or cancelled up to a few days ahead without penalty. I've been happy several times with renting through Auto Europe.
I use priceline to compare rates. Hold the cheapest, keep checking about once a week and change the reservation if the price is lower from someone else. I would never prepay as the rates change constantly and I do not want to be locked in. Definitely take you own GPS from home if you want one. However, you can find your way around with just a map and roadsigns. Did it that way for years. Don't count on an automatic in Italy... mostly manual cars.
Reserving ahead of time does no good. They don't put a sticker on the window with your name on it. You get what they have when you show up. If the guy in front of you got the last little cheap car, you'll get a bigger one at the cheap price.
If you pay a consolidator ahead of time, you've screwed yourself by committing the money and you can't walk over to the next counter and get them to match the deal.
Your best odds of getting what you want come from getting it at a place with a high volume or large pool such as an airport. It still doesn't always work out.
We always reserve and never pay in advance, but since we always request an automatic (and have always gotten one doing it this way), we reserve ahead. Sometimes it costs a bit more to get a car at the airport, but your chances of getting an automatic are better that way as they have more cars. Oh, and the only car company we ever had trouble with in Italy was Thrifty. Night driving still not recommended. Find hotel by 3pm, 4 at the latest, and enjoy the rest of the day looking around without that worry.
I would absolutely bring my own GPS. You should have a map and compass as back up should the GPS fail. But the signage in Tuscany is not that great. Be careful of the camera speed zones. They are everywhere.
We have the International Drivers Permit. You won't need it unless something happens, but if it does, you'd better have it! I think we paid $15.00 at the AAA office. Do it.
We have a portable Garmin that we suction cup to the windshield or dashboard and have found it to be Very Useful. We download the map of the country we're going to from the U.S. That way, when she speaks to us, she speaks English, which we find very convenient, lol! Having maps with you as a backup in case of bad weather and "satellites cannot be found" is not a bad idea as well.
The other posters have given you good advice re car rentals. Don't worry, we've driven in Spain, Italy and France and Ireland without any major issues. The freedom is nice. We never get the smallest car as my husband is 6'4 and he doesn't fit in the golf cart size.
One thing I want to add here is that you probably will not want to drive the Amalfi Coast. The rest of Italy and Sicily yes, but Amalfi probably better leave to a professional.
We have driven in Italy twice and both times we rented through Auto Europe. I always rent in advance and then monitor their web-site to see if the rates go down and if so, you can call and they will give you the lower rate. Auto Europe is located in Maine and are easy to deal with. I would definitely take and use a GPS. We bring our Garmin from home and found it to be invaluable. It's not foolproof; one time it took us on a small country road to the wrong place but for the most part, it gave us excellent directions and we would not drive in Italy without it! We rented a car to drive in Tuscany and also in the Dolomites. We always get an International Drivers Permit from AAA as well. It's very easy to get. Have a great trip.
We have rented with Auto Europe a couple of times. I would highly recommend that you get the supplemental insurance. We had a bad experience once where the car we rented had a couple of small scratches when we picked it up, but didn't notice that they weren't documented,ended on the rental receipt. When we turned the car I , they made a big fuss over the scratches. Thank goodness we had insurance to cover them or we would have been liable. Now I'd be sure to inspect carefully and take photos of any damage no matter how small and insist that it was listed on the rental receipt. You'll get the cheapest rate if you get stick shift, as that's what most Europeans drive.