Portugal to Madrid

Drop fees for picking up in one country and dropping in another are very high (like $700-$1,000). Portugal and Spain are not as well connected as one would expect. Maybe start in Porto, go to Lisbon next, then to Madrid by plane. There used to be an overnight train too between Lisbon and Madrid, not sure if this still exists. Also, I would not drive between Lisbon and Porto. Unless you have a lot of stops planned in between over multiple days, better to take the train.

Distances traveled in Spain can be great. Look into Vueling, the budget airline for flying to/from/around Spain.

I did this trip in reverse, starting in Madrid, going through the Algarve, up the east side of Portugal, then through the Duoro valley to Porto. I then visited a number of smaller towns on the way to Lisbon. Yes the drop charge is expensive. I spoke with one of the Customer service reps on AutoEurope's toll free number and he did a bit of searching for me. He finally got me a deal with Avis from Madrid and dropping car in Lisbon that included a $375 drop charge and overall saved me over $500 from the best price on their website. I would call and talk to a rep after scouring the site for a rental and see if she could help.

I had a great time driving on the trip and would certainly do it again. If you drove from Porto, you could easily stop in Salamanca, Avila and Segovia on your way to Madrid. I've driven quite extensively in Spain on both major and secondary roads and thought that they were safe and in good repair.

Thanks all for your comments! Phillip, we did think Salamanca would be a good place to stop. I will definitely take your advice regarding the rental car. Thanks again!