The stretch between Tilaran and Monteverde is dreadful. The road is in such disrepair that we recommend going back south toward San Jose and around on the Pan American hwy. Or if your plans include a stay in Nuevo Arenal or Tilaran, go back out the the Pan American highway and drive north to Canas. From there the roads are fine up to Tilaran and Nuevo Arenal. You can pretty much rely on the tour vans to get you around for your activities.
Cabs are available back and forth from the hot springs and the hotels as well.
You certainly don't have to have a car here, but very little is within walking distance of the hotels, so you'll have to rely on other rides. It's very romantic. It's more fun to see the volcano, and you'll have plenty of opportunities to spot birds and other wildlife from afar. If renting a car, a 4X4 is a good idea in the rainy season. All rights reserved.