1. your US insurance doesn’t work
2. car rental agencies use this to bilk you–they scare you into buying extra insurance, doubling the price of your rental
3. Get an American Express card (some other cards cover international car rentals). Check with the company to see if you have to add the car rental insurance coverage (they charge you $25 per rental). I don’t use this card for my US rentals, because these are covered by my US insurance.
4. Get coverage for everything but liability through American Express. I had to buy liability at $13/day [see http://travel.aol.com/articles/mexico-transportation-how-to-rent-a-car-on-your-vacation]
5. TAKE PICTURES OF EVERY PIECE OF THE CAR YOU RENT. Include the gas gauge. Check that there’s a spare tire, jack, etc. Look for lights, mirrors, cigarette lighters. Note it all down on your contract.
Now you’re on your way. See hints for driving in Mexico!