What a dilemma is the transportation for those who have visited this city, am I right?
If you are visiting Lima for just a couple of nights (which is the minimum fair stay for the wide range of attractions in this city), then the suggestion is to avoid the fuss, and more over if it is your first time in this heavy traffic city. The best always would be that a local operator takes care of you and you just relax while you catch a good conversation with your driver or guide (by the way, we work with English speaking drivers who can be easily graduated as guides!)
If you are in Lima for business and you are staying for more than 2 days, then, it is a thing that you might think about it, if you have already enjoyed a bit of the adventure in the traffic in other Latin America countries.
If you are thinking in travelling around Peru driving a car, then it might be an option. Something to take into account are that the distances in Peru are really long and driving into the Andes is quite a challenge. Probably, it is a good idea if you think in a route along the coast, that route is nice and easy. Domestic flight fares have now come down and with the entrance to the market of low-cost air companies, it is a great to compare different services and prices, as well as timings.
Driving in the traffic of Lima is a demanding job for those who are used to drive in places where everybody respects the rules. Here you have to be careful if a dog crosses, if some children are playing around, if there is a pothole, if another driver crosses the red and you are in green, if people are getting off a bus in the middle of the street, if the traffic lights are broken, etc…
There are some international car rental companies at Lima airport, and you can notice it is a small offer for such a big city. Seems like people is afraid about it… and insurance is high because the risks are high.
On another point, and a thing you also have to consider, is that there is no metro system in our city. So far, we have a small route of a metro line covering around 20km which is a very short amount for a big city of around 11 million inhabitants. A second metro line is in project, but probably ready in minimum 10 years more. There is another transportation system called El Metropolitano also covering other 20km approximately… These facts make the avenues of Lima very busy with buses and taxis.
In short, if you like adventure, rent a car in Lima or Peru is a good idea : )