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Driving in Kota Kinabalu is as easy as anywhere else. They follow the British system, steering wheel on the right, drive on the left, and markings are in kilometers. Speed limit is 50 km/h in residential, and 100 km/h on the few highways.
You can buy a decent map from any stationary store (and some bigger petrol stations), or pick up a touristy, not-to-scale map from the hotel you are staying at.
Visitors can get a fair bit of value out of a car rental for getting around. Sure, taxis are cheap, but it adds up in the end. Parking in the city is a bit tricky, but you have to know where to park. There are big parking arcades in the Centrepoint (usually always has parking on the 5th floor) and Wisma Merdeka. They are on either side of the CBD and parking in either will put you within walking distance of everything.
There is another shopping centre and parking arcade at Karamunsing, but parking there will put you in range of only that complex, and the parking lots here are usually quite full. Anywhere else, just trawl around for a bit and usually something opens up. At night, it's not too crowded, except around the popular hangouts like the Waterfront and around Shenanigans and the Hyatt.
Safety is relative. The Sabahans are not really aggressive drivers, although the big SUV drivers like to tailgate and intimidate. In general, expect anything and do your best in defensive driving.
Traffic is still a bit of a mess during peak periods in the morning and the evenings and Saturday and Sunday mornings due to various construction sites. Otherwise, traffic is tolerable.
Road quality is relatively good, except on the back roads and far-flung rural areas. Many roads don't have restrictions for heavy trucks, which cart around mostly timber, so with constant rain and pounding by these heavy vehicles, potholes are common.
Take care, especially when driving on unfamiliar roads in the pouring rain. Don't be afraid to switch on your hazards and find the side of the road to wait it out (not too far, beware the open, uncovered monsoon drains). Also, beware pools of water that form on the road during heavy downpours. After the rain, they quickly drain away.
Fuel is relatively cheap with many service stations dotted about, and if you rent one of the small cars like a Kancil or a Kellisa, you'll drive forever on one tank.
A hire car would be useful if you want to drive around areas such as KK to Beaufort, Tuaran district and the town. The rest would depend on where you are staying as most of the resorts have shuttle buses into KK for shopping, restaurants, markets etc.