Luggage in a rental is it safe?

Would you do it in New York or Toronto?
At least do it in a well guarded parking lot and hide all belongings in the trunk. Still risky but better than parking in the street

Keep all luggage in the trunk - out of sight of any passers-by. Since this is a concern, be sure to get a car with a closed trunk, which would be basically anything but a hatchback or a truck. If you have too much for a trunk you have too much. Park in as secure a lot as you can easily find, and never leave the bags overnight - bring them all into the hotel, even if you only need 1 of them. Don't leave anything very valuable in the car (keep money, passports, etc on you). There's really no other choice, and you're likely to be fine. I wouldn't worry about it too much.

Luggage in a rental--is it safe?

No, not really. The odds are with you, but...
I've had 2 cars broken into on trips, one in the US and one in Europe, in many years of traveling.
Both times everything was out of sight in the trunk. Just because you're stuff is out of sight, well, they've figured that out. It makes sense to do that, but believe me trunks aren't a problem for the bad guys and they know that's where your goodies are when it's a tourist care (they know) and you're parked somewhere during the day.
One of the break-ins I suffered was during the day, one was overnight. The overnight one was in the US, I had a large amount of camping equipment, it was late, at a hotel, I was tired, and dumb.

All of us are basically forced to leave things in the trunk, during the day, when parked at a sight--not feasible to drag your luggage with you.
In those situations, might advice would be to take everything with you that is vital to the trip--and those things should already be on your person and hopefully in your money belt.

As suggested above put everything in the trunk and try to park so that the rear end of the car is up against a wall if at all possible, making it virtually Impossible to open the trunk.

I saw a bunch of thieves in Lucerne break into a car. They did it in full view of about six of us on a busy street. They had a huge bunch of keys on a ring and they just kept trying the keys until they found the one that worked. I asked a Swiss lady beside me if we shouldn't call the police. Her reply was that the thieves were obviously immigrants (read: Eastern Europeans) and the police would do nothing. I went to the police station and reported it. I was asked if it was my car. When I said no the cops lost interest. So endeth the lesson.

On the west side of central Portugal, with all those 'Age of Discovery booty' sites to see so close together, I think every other car in the lot had some luggage in it. Between that and the security guards patrolling the lots in places like Batalha Monestary, I think the odds are okay,... especially compared to leaving a car full of stuff overnight on the street in front of my house... o_O

Unless you are hiring a larger car, you will probably find that only one bag fits in the trunk, so the other will be visible. Most of the crime problems seem to be in the Algarve not further north.

I have had somebody try to jemmy the passenger door lock when parked at the supermarket near Salema on the Algarve when nothing was visible in the car and there were plenty people around. It's just unlucky if it happens. You can only be as careful as you can.

This is a challenge that I have also worried about. Some countries a lot of the stuff is on the way between hotel stops, so you are forced to take the chance or compromise your sightseeing plans a lot. We have left luggage in the trunk during the day in every country in which we have driven, about eight or nine. Some countries are worse for break ins than others, at least that's my perception. You probably won't have a choice between a hatchback and a real trunk. Plus (I probably sound like a broken record as I have mentioned it in other posts) trunks are getting smaller on rental cars. The auto makers want a bigger dash to charge for extra gizmos I think. Two 25" bags in a compact can be a real stretch - we almost ran afoul of this on our 2013 England trip. You could kind of see one bag peeking out so we really took a chance. I think Cameras are everywhere in Britain, just like in the U.S. So that might have helped. I am thinking about going to a 22" plus my carry on. I'll still check it but I can be more assured it will fit. That's about 50% less capacity though. The best approach is pack light and don't leave iPads, passports and other critical items in the trunk. Never leave anything visible in the passenger compartment. Some people say put a local newspaper in the windows, which I have done. Might not help, but can't hurt.