In order to rent a car in Thailand, you'll need three things: a Thai driver's license or International Driving Permit (IDP), a valid passport and a credit card for collateral (or a significant amount of cash, but that, of course, is not the best idea). The car rental company will hold your passport until you return the car in a condition they're comfortable with.
It depends on the rental company, but in general the condition of the rental cars in Thailand is shabbier than in the US and Europe. It's not uncommon to be handed the keys to a rental with dings, low fluid levels, scratched paint and ripped upholstery. Before driving off, check the car yourself: have a look at the fluids, belts, tires and spare tire. It is absolutely vital that you insure the car, as you are probably going to be held responsible for any accidents that occur.
Before choosing to rent, understand that driving in Thailand is an "adventure." First, in major cities parking is often very difficult to find, and expensive for long-term stays. Complicated civic planning (including one-ways, seemingly random medians and byzantine traffic patterns) mean that walking is often faster in the cities. Dense traffic in Bangkok is generally bypassable by skytrain or subway, and chauffeured vans are easy to come by for travel into rural and semi-rural areas. Motorcycle and scooter traffic is kamikaze style; if you're not savvy, you could easily injure or kill someone. Finally, if you're not a spectacular defensive driver, have any sort of road rage issues, aren't perfectly comfortable bouncing along dirt roads, or have little patience for extremely dense traffic, you'll be much happier relaxing in a tuk-tuk or a taxi (or hiring a local guide with his own vehicle, if you're outside the metropolis.)
Be sure to remind every passenger never to open a car door until checking carefully for oncoming motorcycle and scooter traffic. It's legal and normal in Thailand for two-wheeled vehicles to drive in the spaces between cars, lanes, and the curb, and even sometimes on the sidewalks. As such, it's shockingly common for motorcycles to run into open car doors at high speed, injuring or killing the motorcyclist and/or the auto passenger. It is vital to note that, in this case, the car owner is liable for all damages.
If you're pulled over in Thailand for a moving violation, the standard procedure is for the driver to give the police officer his or her driver's license in exchange for the ticket. The next step is to go to the local police station, pay the ticket and retrieve the license. It is not uncommon to settle with the police officer onsite, for an average fee of 300 baht in cash. It's advised to keep that amount out of sight in the car for such an occasion, and it to discreetly pass it to the officer out of pedestrian view.
