In reply to leroybrown:
A group of 4 of use recently flew to Malaga and hired from malagacars. I can check exactly how much when I'm home, but it was roughly £180-£190 for a Citroen C3 for 11 or 12 days, including FULLY comp insurance. Between 4 of us this was fine, and included half a tank of fuel, and free 2nd driver. Stupidly I filled up the tank (having previously been to Costa Blanca where everything was miles away) which meant I gave them more than half the tank back without refund, but my own fault.
In Costa we rented a Berlingo, which I TRASHED, not intentionally, but we got stuck down a dirt road which I had some struggle getting back up! The fully comp for that was about £60-70 for 2 weeks and they were fine with the damage (borderline written off with the under car/ chassis damage)
Word of warning with malagacars, the car had a lot of scratches on it, so I took some photos back into the office to ask the guy to sign them off, and he laughed in my face, seriously amused, and said "You've bought the fully comp insurance! It's not YOUR problem", and refused to come out and look, he didn't care; heavily implying it would be the next dude's problem that didn't buy the full insurance. Additionally, you get picked up in a van to be taken off the airport, but it's not far, and after dropping it back off I jogged it back to the airport in under a minute, so don't be scared by that. In all I think a good service, providing you buy insurance, and cheaper than the rest.
Having said all that, depending on where you stay, where you wanna go, a car isn't a must, but it is a good luxury.