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Rental cars and drop-off fees

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For our proposed August trip to Germany/Austria/italy, i am trying to determine which of the following options would be most expedient/cost-effective:

1...Pick up a car upon arrival in Frankfurt, drop it off in Florence . This option probably gives us the most flexiblity for touring around....Rothenburg,Munich Mittenwald, Salzburg...Venice for 1 night, Tuscany for 6 nights.

2...Pick up a car at Frankfurt Airport...tour Rothenburg and Romantic road down to Mittenwald for 4 nights, head up to Munich for 1 night.Drop off car... Train to Venice, stay 1 night,,,Train to Florence, get rental car for duration of stay and drop off at airport prior to departure.

Any suggestions or alternatives? We(family of 4) are trying to keep costs down as much as possible.

Thanks so much for all your input!!
Lori

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