The first thing to remember is that the Algarve is a relatively small area measuring approximately 160 km long by 40 km wide.
You best bet therefore would be to base yourselves at say two or three places for 3 to four days each and then explore out from there.
If you want to avoid high rises keep well clear of Albufeira, which is the centre of mass tourism in the Algarve.
I would recommend something along the following lines:
Day 1 - 4 Head for Tavira and base yourselves there for 3 to 4 days. From there you can visit Castro Marim, Ayamonte, (just over the border in Spain), Vila Real Stª. Antonio.
On Day 4 - 5 Take the route up the left bank of the Guadiana River (Portugal/Spanish Borded) and visit Alcoutim and Mertola, and head for the old Roman town of Serpa. Be warned that this route can be very hot in late June, July and August.
See this article on my blog which may be of use:
http://barlaventostravelblog.blogspot.com/2008/01/serpa-alentejo.html
Day 5 -6 - Drive Serpa/Beja/Odemira. Have a look at the old centre of Beja and the agricultural town of Odemira. From there continue the 100km to Sagres.
In the area of Sagres, I can recommend the following places:
Sagres:
Guest House Albergaria dos Mareantes
http://www.paraisolpraia.com/index.php?content=sel_hotel
email: paraisolpraia@gmail.com
or call Maria de Jesus on 00 351 918441745
Between Praia de Luz and Burgau (20 minutes from Sagres)
Guest House - Aurora-Sol
http://www.docemaralgarve.com/aurora.htm
email: info@docemaralgarve.com
Sra. Lucilia Matos
Day 7-9 from Sagres/Burgau Visit the spectacular west coast of the Algarve with its hidden coves and spectacular cliffs. Drive to the delighful inland town of Monchique nestled on the top of the small mountain by the same name. Visit the Spa 5kms from the town at Caldas de Monchique.
Day 10-12 - Stay in Lagos 30 km from Sagres. This is one of the oldest towns in the Algarve and was the departure point for many of the Portuguese Voyages of Discovery which opened the route around the Cape. It still retains its Portuguese character. During this time also visit Silves, 30km distant with its old Moorish City walls.
Back to Faro Airport 1 hours drive.
Please note that this is just a suggestion and can be played around with. However, it will keep you away from the mass tourism.
As regards a hire car, I recommend Luzcar who have offices in Lagos and a base at Faro Airport. Their prices may not be the cheapest at first glance but are all-inclusive. Their vehicles are of high standard and can be taken into Spain. I have know them and used them for 10 years.
More info here:
http://www.paraisolpraia.com/carhirealgarve/index.php?option=en
Have a good trip
Hope this helps.
