If you don't come in a group or organized even, it's a good idea to rent a car in the Algarve. Most of the towns and cities in the region have a limited public transportation network; buses and trains will take you from town to town, but usually they are limited to city centres and won't extend to the outskirts of the city, and Taxis are somewhat expensive. So consider getting a rental if you have plans for making the most of sightseeing outside the area you're staying in.
Also your best chances in finding a rental are at major cities or tourist hubs like Albufeira, Faro, Tavira, etc. If you're staying in a small coastal village you might have to go to one of the major surrounding cities to rent a vehicle. For commodity, the best option is to pick up a car at Faro Airport where you can drop it off after as well. Ah... In Portugal we drive on the right side of the road and the steering wheel is on the left side, usually cars have a manual gearbox and Diesel is much cheaper than Petrol.
Rent a Car Online and Pick It Up at Faro Airport
RentalCars.com
This is one of the most convenient options to rent a vehicle for your holidays in Lagos and around the Algarve.
Car Hire at Faro Airport
You will find the companies for car hire in Algarve at Faro Airport Terminal.
Auto Jardim/ AutoJardim Algarve (+351) 289 800 881
AVIS / Sovial,Lda (+351) 289 889 456
Budget /AA Castanheira (+351) 289 889 440
Europcar/ Europcar SA (+351) 289 889 447
SIXT/ Auro Rent (+351) 289 818 294
National/ Alamo/ Guérin Lda. (+351) 289 800 883
Hertz/ H.R, SA (+351) 289 818 248
Rentauto/ Machado&Monteiro, Lda (+351) 289 818 718