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Spain - car rental, bus or train?

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First I would like to thank all of you who have assisted in the planning our 2 week trip. My topic about Granada was very helpful. Now I'd like advice on how to get to the places we've chosen to visit.

We fly to Madrid and after a few days leave for Malaga. My first thought was to use train for all of our travelling but am now starting to explore other options. I have looked at train travel and my first thought is that it is expensive. Not as expensive as in Canada but expensive enough.

After Madrid our first stop will be Benalmadena. We thought train to Malaga and bus to Benalmadena is the way to go. While at Benalmadena we will do a few half day or day trips (Ronda, Gibraltar etc.). After a week we head to Granada for 3 nights then Toledo for 3 nights then fly home.

Here are my questions:
Should we rent a car for the whole time? We have driven in Europe before.

Should we take the train to Malaga and rent a car for our time on the Costa del Sol?

Should we take the train to Malaga and use local buses during our week there?

If we don't have a car we would probably take a bus from Malaga to Granada then bus again to Toledo. Train is also an option in both places.

We have used both train and bus transportation in other countries. However we do not speak Spanish and wonder if this will be a major problem.

Thanks in advance for any hints you advice you can give me.

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