Rental Car in Silicy

The least expensive place to rent the car will be the Palermo airport which is outside of the city center. If you are planning to spend some time IN Palermo in the beginning of the trip, taxi or bus to your hotel and enjoy yourself, then taxi or bus back to the airport to pick the car up. I've done this a number of times, both in Italy and in Paris, and always found this to be the least expensive, least troublesome way, and I avoid any inner-city driving. It works the same at either end, but usually, I spend time in the arrival city to get rid of jet lag rather than trying to arrive and drive.

For car rental prices, I go to kayak.com. There are a number of car rental agencies and you can compare prices.

I just picked up a rental car in Palermo in May 2014. We used Kemwel, and found that they had a MUCH cheaper rate than either AutoEurope (their sister company) or Gemut. For us, the non-negotiables were an automatic transmission, zero deductible, and a car large enough to hold all our luggage out of sight in the trunk. Our rental ended up being from Hertz, and our car ended up being a Fiat 500L, which turned out to have a trunk area just large enough for all our stuff; we were very glad we didn't get a smaller car, even though there were just two of us.

For our particular rental, it ended up being cheaper from the city location rather than the airport. Of course, we were worried about getting out of town, but to get from the Hertz office to the highway turned out to involve only a few turns and a few surface roads. The one thing that everyone in Palermo agreed on was that we should not try to drive through the old part of town, and fortunately this was not at all necessary.

If you want more details about my trip to Sicily, here's my report: https://community.ricksteves.com/travel-forum/trip-reports/sicily-palermo-caltanisetta-siracusa-taormina.

Note that I still haven't finished it, so do check back for updates, or PM me if you have questions.

I shopped around for the best rate for a few days rental out of the Palermo Airport, ended up with Sixt, and had an excellent experience last month, May 2014. I was given a brand new Fiat Punto, with 10 km on it. It was a manual transmission and I had not driven one in 20 years, but it came back to me in an instant, no problem. One bit of advice from experience, with any manual transmission rental, make sure you know how to get into reverse, when you pick up the car. On my rental it was kind of strange, easy once I was shown, but I may never have figured out on my own to lift UP on the handle before being able to shift into reverse.

www.kemwel.com or www.autoeurope.com.
They are two consolidators part of the same TSI corporation now (merger was 3 years ago). Prices are generally lower with kemwel, for whatever reason, but shop both just in case. It's the same type of service.
Renting from the airport will always carry higher daily rental rates, therefore it makes sense (and cents) to rent from a city location, since you plan to be in the city for a few days first anyhow.
You can return the car at the airport when you depart, without incurring any additional fees.

I originally booked with Sixt, but then when I decided to change my route slightly, their prices had gone up a lot, maybe because it was closer to the rental date. Then I found a better deal on Auto Europe. It required prepayment but promised a full refund if I cancelled up to 3 days in advance. It turned out to be Hertz in Palermo city location, and they gave me a free upgrade and a new Fiat Qubo diesel (1500 km on the odometer!). In all my trial & error searching, it seemed like renting at the airport was considerably more expensive. I used public transportation for 2 days in Palermo and a day in Cefalu, then rented the car to tour south and east, ending in Catania. I had been strongly advised to schlep back out to the airport to rent the car because driving in Palermo was difficult. Hogwash. It was easy to get to the highway from the Hertz location. As others have said, if you can't drive a manual transmission, then be prepared to pay a lot more for the rental.

Thanks much everyone for the recommendations! I think we will check out Hertz first, will like to pick up the car in the city and drop off at airport at the end of trip.

Linda

Another benefit of airport drop off is that they're usually open longer hours. You can have the car inspected for damage by a live agent and get them to sign a statement of condition. In Sicily, among other places, readers have recently been charged for damage when dropping a car during closed hours. See also http://www.ricksteves.com/travel-tips/transportation/rental-car-pick-up-return.

Linda, after I booked with Auto Europe, I looked at the Hertz website. Rates directly through them were much higher.