I never rent a car and have never felt limited. Transportation outside of the U.S. is much better, virtually everywhere. While trains in Europe are ubiquitous, developing countries usually have excellent bus transportation. For instance, I took a bus between Guatemala and Honduras. It was a brand new Mercedes bus with attendants who provided a free hot meal, breakfast from Burger King, and coffee. The seats were leather and I would compare it to business class seating on a plane. They had headphones sitting on the seats and showed movies on a flat screen TV, though you need to like American action flicks.
Also a good bet and cheaper than a taxi are shuttles. It’s nice to leave the baggage claim and see someone holding a card with your name on it. You may have to share the ride with other travelers but consider that an opportunity to meet people, possibly people you want to hang around with. Shared taxis to villages are another option, although I’d avoid them in mountainous areas where they tend to disregard yellow no passing lines. The faster they get to their destination, the more money they make. In this case I’d opt for a bus—slower, but more likely to “win” in dangerous passing situations. For shorter distances, consider tuk tuks. They resemble a golf cart with a better engine. They are very inexpensive for local travel, usually less than a dollar. Being open air, they are fun and a great way to see places.