Driving your own vehicle through Mexico or renting one to drive while on vacation can provide a wonderful, go-at-your-own-pace type of experience. That being said there are several things you should be aware of if you drive while on vacation in Mexico.
Getting insurance for driving in Mexico is a must, whether it is for your own car or a rental. An accident, even if you are not at fault, will not be just an inconvenience, but could affect the rest of your vacation. Most companies exclude coverage in a foreign country and a policy supplied by your insurance company may not be valid in Mexico. There are insurance vendors on both sides of the border, but it is wise to obtain it before you enter, as it will be quite cheaper.
If you drive your own vehicle across the border you will need to be aware of regulations regarding bringing more than $50 of merchandise into the country. What the border guards are looking for are items that are being brought in that could be sold. You can avoid most trouble if you take the tags off of new clothing, anything in a box should be opened and taken out and the packaging discarded, and don't have any new supplies in shopping bags. Distribute anything new among your baggage and you should be fine.
Driving on the highway systems will probably remind you of many roads back home as they are, for the most part, modern and well signed. Most of the roads are toll roads, because, in Mexico, tolls pay to keep the roads maintained instead of taxes. It is prudent to have a hefty handful of small bills for this "pay as you go" system. But the cost of tolls is definitely worth it because the highway roads are much better than the pothole ridden two lane roads you would have otherwise used.
It is advisable to avoid driving at night in Mexico. Many of the smaller two-lane roads will have livestock issues that could be dangerous and most assaults that would happen on the roads would certainly happen at night. Be aware that most tourist deaths that happen in Mexico involve automobile accidents.
Above all, practice defensive driving while in Mexico. Mexican drivers, especially truck drivers and bus drivers, are very polite and will let you pull out or pass them. But other drivers, especially in the cities can be aggressive. You don't want to get into an accident if you can avoid it because, if an accident causes an injury, all cars will be impounded until the situation can have a complete accounting. This could turn into quite an ordeal, even if you are innocent in the matter.
Make sure that you obtain insurance that will protect you while driving in Mexico. Try to stay on the main toll roads and avoid rural areas where livestock might be a dangerous hindrance. Avoid driving at night whenever possible for safe driving and for security from possible assaults. And practicing defensive driving at all times. All these tips will help make your vacation safer and easier while on vacation in Mexico.