I have seen several small, family run hotels on Greek islands that say they can arrange car rental for a day or so on their island. I've always arranged car rental from home (picking up at an airport), but since we'd only rent for 1 or 2 days out of 4 or 5 days, wondered if this other option is a good idea. Travel agencies also will arrange car rentals as part of a package - is that going to end up really expensive? Any thoughts/ recommendations welcome.
Karen, I rented a Car on Santorini a few months ago, but it wasn't arranged by the Hotel. I had booked Ferry and transfers via one of the Greek Travel Agencies and when the representative picked me up at the dock, I asked her about car rentals. She provided her phone number and I called her after I got settled. She delivered the Car to the Hotel, and we completed the paperwork in the Lobby. It was a very easy rental experience! Especially in Greece, I didn't want any problems, so accepted the rental agency CDW. I was only renting for one day, so didn't really care how much it cost. One point to mention about driving in Greece, is that AFAIK an International Driver's Permit is compulsory. This is valid for one year, and must be used in conjunction with your home D.L. Given the low cost for an IDP, I figured it was a good idea. Best to have it if requested by local authorities, rather than being fined for not having it! You might find it helpful to have a look at the "driving in Greece" section on Matt Barrett's website. Happy travels!
The first thing to think about is whether you'll need a rental car at all. For example, if Santorini is your destination, the island is small, and it's so easy to see all you'd want to see using their inexpensive local buses, that IMO you wouldn't need a car at all. On the other hand, if you're headed for Crete, the island is so large that a car is pretty much a necessity.