We prefer to use pubic transit whenever possible but have rented cars on occasion.
If you rent a car get the Via Verde transponder for the highway which can also be set up to pay for parking at some locations.
I also get the car rental ( not a third party ) extended CDW (Collision, Damage Waiver) insurance that covers everything including the tires – yes , that’s a new way for rental companies to get more money ( damage / wear on tires).
Familiarize yourself with driving in Portugal, items that stand out for me:
-entering and exiting a multi-lane roundabout – not as simple as it looks
-pedestrian crossings that aren’t controlled by lights – scary how pedestrians just cross in front of cars traveling at full speed
-disrespect of stop signs – more of a suggestion for Portuguese drivers
-bikes between cars
-driving a manual transmission car on the hills and NOT rolling back into car the behind me
-very slippery cobble stone roads when wet
-very narrow spaces to drive in some areas
-can’t find parking
-know the words for fuel – Gasoleo is Diesel – Gasolina is Gasoline
If you rent a diesel fueled car be aware that pollution reducing additives are required to run the engine - Adblue additive is one example -
make sure the rental agency fills the car with the additive before you take possession of the car.
We found that driving on the highways outside of cities was good, inside the cities was stressful.