I live on Phuket and have no problems driving around the island. Drive a little slower than you would ordinarily, do the things you would back home and you'll be fine. Common sense it is called. Keep an eye out for motorcycles, don't do anything suddenly.

In spite of all the rumors and problems you will read about in on-line forums, I personally, have never had a problem with corrupt police - nor have most the people I know.

Rent your car from a REPUTABLE international company and you'll have NO PROBLEMS with insurance, or police, or if you have an accident.

At one time I rented cars semi-regularly (for long drives and vacations) as I had an older vehicle that was not so comfortable.  That experience leads me to recommend Budget Rent a Car.

Budget is competitively priced, delivers to wherever you are and are "Johnny on the spot" if you have an accident or any problems. Uh, how do I know this? A friend was rear-ended in a Budget rental car in August 2005. Not her fault of course. Called their number - they showed up quickly - and their insurance guy was on the scene within 30 minutes.

IMPORTANT: The police were FAIR and POLITE. I too, had heard all the rumors - "farang is fair game - you'll pay for everything" etc etc etc. Absolutely was not true in this situation. My friend paid for nothing - the insurance guy handled everything - Budget brought another car to replace the one she had rented (it was significantly damaged). The two Thais involved in the accident were fined and paid (we observed all this while we were at the police station).

This was, btw, her first accident in Thailand after living here for five years and driving every day.  I've been on island the same amount of time - and never had an accident (knock on wood!).

So . . . at least by this example - my opinion is: No problem.

Budget by the way - also does not play the "we found new scratches on the car" game that many other local rental agencies play. Always a good rule in life, go with reputable companies.

Now . . . All that said, get out and see the island. Get off the island too.  Drive up to Khao Lak (only an hour), over to Krabi (only about two and a half hours) and see just how beautiful the area really is.

YES, you can find rental car cheaper - but the quality of the vehicle may not be good, follow up in case of an accident may not be good, how do you know the insurance is of good quality - and WILL they stand by you in the event of an accident?  I once rented from a place that said the insurance was good ONLY on the island!  Inspires confidence, no?  Rent from a reputable INTERNATIONAL company and you'll have no worries.

 Here are some great ideas for driving in the area:

Check out:  Phuket's Best Island Drives - areas of the island that even the local expats haven't seen, with stunning sea and bay views.

The Hot Springs Drive (just 4km off the island) with spectacular unknown and deserted long stretches of beach:  Hot Springs Loop.

A car will free you up greatly and you won't have to negotiate with a taxi or limo every time you see something interesting just down the road.