Traveling by car Madrid, Seville, Lisbon

It is very doable especially since you’re renting the vehicle in Madrid and returning it to Madrid. Since you’d be making a loop. a suggested loop might be, Madrid south to Sevilla, then via Huelva, over to Portugal and up to Lisbon. On the return, Lisbon over to Evora and enter Spain at Badajoz, over to Mérida,up to Cáceres, then back to Madrid.

I will say that you could easily spend 12 days going down to Sevilla via Córdoba and back to Madrid via Extremadura.

If you plan to drive in Portugal it has plenty of electronic payment only toll roads. After picking up the rental car and before entering Portugal, register the vehicle on the Portugal Tolls website and provide credit card information so your card will be billed. Your registration will remain in effect for 30 days. When you leave Portugal, unregister the vehicle, so you don’t receive additional toll charges if the next renter takes the vehicle into Portugal. Southern Portugal still has a number of manual tolls where you get a ticket and pay when you leave the road. It seems to take a while for the charges make it to your card. I say that because I passed through transponders on September 6, 7, and 12, and only the ones from the 6th have shown up.

For estimation of travel times without any stops:
Madrid - Sevilla 5-5.5 hours
Sevilla - Lisbon 4.5-5 hours
Lisbon - Madrid 6-6.5 hours

Petrol, unleaded 95 is 1.89€-1.94€ per liter ($7.18-$7.37 per gallon).

For a city trip, I would use the train -- you don't mention if you intended to stop in smaller places or focus on the cities. But I would also omit Lisbon and make better use of the car because transit to Lisbon is limited and there is so much to see in the area of Spain you will be.

Thanks for the info. I've read a bit about how difficult it may be to find parking and also how difficult to drive in the cities. Would it be better to stay outside of the cities or in the suburbs and use public transportation to get to the points of interest? or to stay in smaller towns?

I would agree that a car would work, with the caveat that three cities, 12 days, does not really leave much time for much else in between, which normally would be the reason for having the car.

As for travel by other means, the train is fast and easy between Madrid and Seville, however, between Seville and Lisbon and Lisbon and Madrid, it is another issue. Train connections between Spain and Portugal are all but non-existent, meaning a bus, some combination of Bus and train, or fly.

Given that, many opt to either focus on Spain (loads of places to go) or focus on Portugal (again, very well worth 12 days)

By car, verify your rental company is OK with you going into Portugal. You will need an IDP. Parking will be an issue in all three places. Toll roads will not be much an issue for you in Spain, just around Madrid. In Portugal, toll roads are much more common.

You might consider limiting your rental days and hassle by picking a car up in Seville, and returning in Madrid at the end of the trip, you could probably get the rental down to a week.

This is the crux of the matter
I would agree that a car would work, with the caveat that three cities, 12 days, does not really leave much time for much else in between, which normally would be the reason for having the car.
They are different trips--enjoy cities, enjoy the countryside, or enjoy two cities and put a rural trip by car in the middle. You have to choose the one you want, but I see nothing enjoyable about a long drive without any side trips, which will detract from your time in three cities with tons of sites.

Ive got a rental car in Spain right now. It’s a pain in the rear, and I’ve only done it for the 5 days of this trip that are mostly small, remote places. I took a train from Madrid to the region, and will go back to Madrid by train.

Despite being remote, and mostly on twisty roads, I’ve also covered about 150-200kms on highways. That’s cost me about 15€ in tolls.

Also, the Kia Sportage I have here may be “compact” by NorthAmerican standards, but it’s also too big for parking spots here.

Would it be better to stay outside of the cities or in the suburbs and use public transportation to get to the points of interest?

It’s just as bad- maybe worse. That’s a whole lot of time wasted, and a big loss of wondering lively city-center streets into the evening.

If visiting cities, parking and driving can be a pain while it generally isn’t an issue in small towns and villages. For my trips, I now look up free parking lots for the places I intend on visiting and bookmark them on Google maps. It takes me straight to them. I also book hotels that have on-site parking.

I always get a rental car and currently have one for Spain and Portugal. I don’t think they are a pain in the rear. I do try to avoid tolls roads by using back roads when possible.

Thanks for the responses. All good. We are planning on hitting a lot of "out of the cities" places. (Toledo, Segovia, Avila, Granada, Cordoba, Ronda, Arcos, Gibraltar). We don't mind the driving and love to see the countryside of the different countries we visit. Also the flexibility to amend plans on the fly. We may skip Lisbon, but would like to keep that as an option. If anyone has other recommendations to add or change on our list, we welcome the input.

Your 12 days is barely enough time to cover the Spanish places you list and Gibraltar, and that's assuming you're only planning to fly in and out of Madrid, not do much sightseeing there. A car will be helpful only in reaching Arcos, Ronda and Gibraltar. Public transportation is readily available between Madrid, Cordoba, Seville and Granada. Toledo's on a spur line from Madrid with frequent rail service. The fast trains will get you from Madrid to Toledo, Madrid to Cordoba and Cordoba to Seville much faster than driving.

I'd recommend Segovia rather than Avila. Avila has a wall, and that's about it.

I agree with acraven about Ávila. One can get a good view of the town from the Cuatro Postes overlook. It’s walkable from town but we drove to it. We spent a night there earlier this month and other than walking the wall, there’s little else to do. We were there on a Monday and the few sites that there are were closed, including the Church and birthplace of Saint Teresa of Jesus.

We are planning on hitting a lot of "out of the cities" places. (Toledo, Segovia, Avila, Granada, Cordoba, Ronda, Arcos, Gibraltar).

Most of those places listed are cities. Smaller than the county’s headline places, but cities nonetheless. There are even 4 provincial capitals in there, one of which as serves as capital of its Autonomous Community (State).

That expanded list is too much for 12 days, and I still don't see how a car would be of any help. Train is often much faster.
I have never felt as sleepy as I did on our Spain drives last year--and we had an itinerary that required a car.