Is it ok to rent a car in either Lyon or Geneva and drive it to Italy and back? I'm wondering if it's ok with the rental company to travel between countries? Planning on making it a round trip and returning it to the same city.
Yes it is ok. As long as you drop it back where you picked it up you will avoid the significant drop off fee.
To clarify Lane's response, if you drop a car off in the same country where you picked it up, there is usually no extra fee (even if it's a different city). But if you drop it off in a different country, the fees are high (reports here say things like $500). If you rent in France, you will have to buy the vignette (pronounced veen-YET-tuh) to drive on Swiss highways (this is instead of collecting tolls on each road). I think I read here that it's 40 CHF for a year, with no shorter periods possible. If you rent in Switzerland, the car should already have a 2013 vignette on it.
To clarify: vignette in Switzerland is just for freeways. If you avoid freeways you don't need vignette.
Thanks, these responses are a big help in my decision making!
To clarify: vignette in Switzerland is just for freeways. If you avoid freeways you don't need vignette. To elaborate on the above post - actually it is for any road with a green sign. Many of the single lane roads between certain places are designated expressways, have green signs not blue, and require a vignette. The road between Spiez and Interlaken, continuing to Luzern is an example. Part of it even has an "A" designation.
And to elaborate even further, your car may already have the vignette for the year on the windshield, bought and placed there by an earlier renter. Or it may not.
About the Swiss vignette, it is for the autobahns and on most maps they are the red roads. I had a friend who prided himself on not buying a vignette and staying on the yellow roads. The only problem is that doing this can also mean a lot of time going over mountain passes the hard way. The thing to remember is that is that many of the autobahns (designated with A route numbers) are two lane roads, not what we think of as "freeways". In 2011 the vignette was only 22 Swiss Francs which is one heck of a lot loss than it will cost you is you stray onto an autobahn without one and a roadside camera catches you and sends you a nice bill through your rental company who will charge you an additional $30+/- for passing it on. My advice is buy the vignette when you cross the border and then relax and take the good roads and enjoy the fantastic scenery. The one thing that nobody has mentioned is that you need an International Driving Permit to drive in Italy You probably will never need to show it, but if you get caught without one the first step is a 250 euro fine on the spot. Then things go down hill from there.
If you will be driving through Switzerland it seems to me it would make sense to spend the 40chf (about $42) for the vignette just to make things easier. It's not that much money in the total trip budget I'm sure and then you don't have to worry about which roads you can drive on. And you may get lucky and get a rental with the vignette already on it. Of course, if you rent the car in Lyon you can get to Italy and back without driving through Switzerland. You don't say what your planned route would be.
Make sure you let the rental car company know your plans. Some companies have restrictions for Italy. They may not let their cars travel there or they may just restrict certain models. The issue may be a large number of accidents, vehicle prowling, or unpaid tickets for limited traffic zones. Rental companies have similar restrictions for former eastern bloc countries, normally because of thefts. As long as you're clear about your plans, it should be no big deal. You also need an International Driver's Permit, IDP. It's available at any triple A office for about $20, bring passport photos if you have some (or they can take them there). Finally, having driven everywhere without a GPS - including Italy - I can't emphasize enough to pack a good GPS with you (rent one if you have to). Italy's road signs are the worst. Even with a good map, you will be lost more than found.
If you will have the car more than 17 days, check into leasing out of Lyon. There is no pick-up, drop-off anywhere in France. Since you own the car, there is no issue with where you take it (other than taking your own safety precautions). CDW is included in the price. If you choose renting, look into American Express's car rental CDW insurance program. It's a good enough deal that you may want to open an account and enroll in the program just for that.