I recommend renting a car. It's nice to be in control of where you go and when you go. Driving is not a problem: 4 lane/divided highway until you are in town. We've always been able to rent a small car for $150.00 or so for the whole week (manual transmission).
However, rent from the U.S. before you go. You'll get better rates, and you'll be certain to have a car when you get there. If you read the posts on Tripadvisor.com about renting, you'll find they recommend Cactus rental (and ask for the Trip Advisor discount) and Dominic (considerably more expensive). This link has the links for both companies:
http://www.tripadvisor.com/ShowTopic-g150773-i83-k4800538-Car_rental-Los_Cabos_Baja_California.html We've rented from Avis and were pleased, but they don't get the rave reviews from Trip Advisor that Cactus and Dominic do.
Things you need to know about the rental experience:
1. Mexico requires MEXICAN 3rd party liability insurance on any vehicle that is on the road. That doesn't cover the vehicle itself; it covers damage you do to others or their property. You can't drive off the lot without having it. It costs about $10.00 a day (maybe a little more, maybe a little less depending on the rental car company).
2. You will need to insure the vehicle itself.
a. you can, of course, buy insurance from the rental car company.
b. you can let the insurance that comes with your credit card cover the vehicle insurance- no additional cost to you if you do this.
c. you can purchase American Express premium coverage if you have an American Express
card (their regular insurance covers the car, too--just like Visa and Mastercard and
doesn't cost any extra). The advantage to the premium insurance is that it is about
$25.00 (exact amount depends on the state in which you live) and it covers the entire
rental period up to 75 days or 90 days....I can't remember which.
d. No matter whether it is Visa/Mastercard/American Express, their insurance is primary
in Mexico, so your own insurance is not involved.
3. Advantages/Disadvantages of using rental car company insurance/credit card insurance
The rental car company insurance will, of course, cost more--but it is local and they deal
with any problems.
The credit card insurance is free and they will deal with the company--but there will be
paper work for you to have to be a part of.
Driving in Mexico:
1. The number one thing to know is that left turns (even if there appears to be a left turn
lane) are not the norm in Mexico. Mexican drivers are really not expecting a car to be
turning left. If there is a "feeder" road beside the highway, you are expected to get on
it before your intersection comes up and then actually drive across the highway from that
position. Even if there is a left turn lane, be really, really cautious--check the rear
view mirror, and if it appears the car bearing down on you from the rear isn't going to
slow down or change lanes, drive on and come back. Our friends who live full time in
Cabo tell us that's the number one cause of accidents/injuries in Cabo to tourists.
2. Stop signs are not always located at the same height as they are in the U.S., so scan more
widely (vertically) than usual.
3. Speed limit is in kilometers. Locals will speed past you, apparently paying no attention
to the speed limit. If you want to avoid all attention from the police, actually abide by
the speed limit; let them pick up someone who is actually speeding--there are plenty to
choose from.
(ADDITIONAL NOTE: Tripadvisor.com has lots of people who live there or who go 3 or 4 times a year answering questions; it's an excellent way to find out local information/restaurant suggestions/fishing charters/etc.
General restaurant reviews:
http://www.tripadvisor.com/Restaurants-g150769-Baja_California.htmlTrapper John's List of Restaurants is considered one of the best: http://www.tripadvisor.com/Travel-g152515-s5/Cabo-San-Lucas:Mexico:Dining.Scene.html