Madeira is one of those destinations where a rental car transforms the trip. The island has buses, taxis, and cable cars β but the places that make Madeira extraordinary are mostly not on any bus route. The north coast road through tunnels and past waterfalls. The mountain viewpoints above the clouds at Pico do Arieiro. The natural lava pools at Porto Moniz. The hidden levada trails that start from forest car parks. With a car, all of this is accessible. Without one, you're limited to what organised tours decide to show you.
This guide covers everything you need to know about renting a car in Madeira: how to choose the right vehicle, where to pick up, what insurance to get, and how to avoid the common mistakes that turn a cheap rental into an expensive one.
Why Renting a Car in Madeira Is Worth It
The practical case for renting a car in Madeira is strong. Public transport covers Funchal and the main towns reasonably well, but it's slow, infrequent, and doesn't reach the levada trailheads, mountain viewpoints, or north coast villages that are the highlights of the island. Taxis are available but expensive for multiple day trips. Organised tours are convenient but inflexible β you see what the tour operator decides you should see, at the time they decide, with 30 other people.
A rental car, split between two or more people, typically costs less than two days of taxis. And it gives you complete freedom: leave when you want, stop when something catches your eye, stay as long as you like, and change your plans when the weather changes (which it does, quickly, in Madeira).
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Choosing the Right Car for Madeira's Roads
This matters more in Madeira than in most destinations. The island's roads include steep mountain climbs, sharp hairpin bends, narrow village streets, and tunnels. A car that would be perfectly adequate on flat European roads can feel underpowered and stressful on Madeira's terrain.
Engine Size
Choose slightly more engine power than you would elsewhere. A 1.0-litre engine that's fine in the Netherlands will struggle on the climb to Pico do Arieiro with four passengers and luggage. A 1.2 or 1.4-litre petrol engine is the minimum for comfortable mountain driving. If you're planning extensive mountain routes, a 1.6-litre or diesel engine is worth the extra cost.
Automatic vs Manual
If you're not confident with hill starts on steep gradients, book an automatic. Madeira's mountain roads involve frequent stops on steep inclines, and an automatic transmission makes this significantly less stressful. Automatic cars are more expensive to rent but the peace of mind is worth it for many drivers.
Car Size
A compact car (Polo, Fiesta, Clio size) is ideal for most Madeira trips β easy to park in the villages, manageable on narrow roads, and economical on fuel. If you have a lot of luggage or are travelling with four adults, a mid-size car (Golf, Focus size) is more comfortable. SUVs are unnecessary β Madeira's roads are paved and don't require high ground clearance.
Where to Pick Up Your Rental Car
Madeira Airport (FNC)
The most convenient option for most visitors. The airport is 20 minutes east of Funchal, and most car rental companies have desks in the arrivals hall or offer a short transfer to a nearby car park. Picking up at the airport means you have your car from the moment you land β no taxi to the hotel, no waiting for a transfer.
Funchal City Centre
If you're arriving by ferry or spending your first night in Funchal before exploring the island, picking up in the city centre is an option. Several local companies have offices in Funchal. The disadvantage is that you'll need to navigate Funchal's traffic and find parking from the start.
Insurance: The Most Important Decision
Car rental insurance in Madeira works the same way as elsewhere in Europe, but the stakes are slightly higher because of the terrain. Here's what you need to know.
Standard rentals include basic CDW (Collision Damage Waiver) with a significant excess β typically β¬500ββ¬1,500. This means if you damage the car, you pay the first β¬500ββ¬1,500 of repairs, and the insurance covers the rest. A large deposit (often matching the excess amount) is held on your credit card for the duration of the rental.
Full insurance (zero excess CDW) eliminates this excess and the deposit hold. You pay a higher daily rate but have complete peace of mind β no money blocked on your card, no liability if you scratch the car on a narrow village road. For Madeira's terrain, full insurance is strongly recommended.
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The Best Places to Visit by Car in Madeira
Pico do Arieiro: Madeira's third-highest peak at 1,818m. The drive from Funchal takes about 45 minutes and climbs through forest and then above the cloud line. The views are extraordinary β often above a sea of clouds with mountain peaks emerging. Go at sunrise for the best experience.
North Coast Road (VE2): The road from Ribeira Brava to Porto Moniz along the north coast is one of the most spectacular drives in Europe. It passes through tunnels carved into the cliffs, past waterfalls that fall directly onto the road, and along a coastline of dramatic volcanic rock. Allow 2β3 hours for the drive with stops.
Porto Moniz: Natural lava pools at the northwestern tip of the island. The pools are formed by volcanic rock and filled by the sea β perfect for swimming in a spectacular setting. There are restaurants overlooking the pools for lunch.
CΓ’mara de Lobos: A fishing village 10 minutes west of Funchal, famous for its painted boats and its vineyards. Winston Churchill painted here. Excellent restaurants for lunch and a short drive to Cabo GirΓ£o (one of Europe's highest sea cliffs).
Fanal Forest: Ancient laurel forest on the Paul da Serra plateau, with gnarled thousand-year-old trees often shrouded in mist. One of the most atmospheric places on the island. Only accessible by car.
Driving Tips for Madeira
- Take your time on mountain roads: The roads are safe but require attention. There's no need to rush β the views are the point.
- Use tunnels: Madeira has an extensive tunnel network that connects the main towns quickly. The scenic roads are more beautiful but much slower.
- Park carefully in villages: Village streets are narrow and parking is limited. If you can't find a safe parking space, drive on and find another spot.
- Watch for pedestrians on mountain roads: Levada walkers often walk along the road to reach trailheads. Drive slowly in forest and mountain areas.
- Fuel up in Funchal: Petrol stations are less frequent in the north and west of the island. Fill up before heading out on a long day trip.
Frequently Asked Questions About Car Rental in Madeira
Is it worth renting a car in Madeira?
Yes, for most visitors. The best experiences on the island β the north coast road, the mountain viewpoints, the levada trailheads β are only accessible by car. Public transport is limited and organised tours are inflexible.
What is the best car to rent in Madeira?
A compact or mid-size car with at least a 1.2-litre engine. Automatic transmission is recommended if you're not confident with hill starts. An SUV is unnecessary.
How much does car rental cost in Madeira?
Prices vary by season and supplier. In low season, compact cars start from around β¬20β30 per day. In peak season (JulyβAugust, Carnival, Flower Festival), prices can be 50β100% higher. Book in advance for the best prices.
Can I drive in Madeira with a UK driving licence?
Yes. UK driving licences are accepted in Portugal (including Madeira). An International Driving Permit is not required for UK licence holders.
