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When getting around Grenada you can use a diverse array of means of transportation. You can drive, take a taxi or a water taxi, board the ferry, hire a motor boat, jump on a bus, take a plane or just walk. It depends on where you go, your desire for diversity and the time that you have to get where you are heading.
To get around St. George town, your best option is to walk. The city is beutiful and if you have the time you can admire the historical sites (be sure to grab a walking tour guide from the Tourism Office at Burns Point). You can take a bus (the service is frequent and inexpensive - $2 EC) or a taxi. A good idea is to hire a taxi to tour the island having agreed a cost per hour or for x hours first, the personnel at the front desk of your hotel can help you with the arrangements. There are also mini vans that can take you in a tour trough the city and to the rest of the island.
The mini-bus system is a fantastic way to travel if you want to be closer to the locals They will wave or honk wherever you need them. Cost is extremely cheap (2EC to ~ 5EC) and even fun considering the way they drive (especially around the hills, remember they do this all day, every day.) You may need to learn a few routes depending where you go on the island, but most routes start and end at the bus terminal in St. Georges. Be specific as to where you want to go and the drivers will usually get you as close as possible on their fixed route. If there is no other passenger on the bus, they may agree to go off the main roads to your destination but the cost is usually doubled.
Here is a great article on the bus system
But, to get around the island, your best choice is to rent a car, usually a light jeep like a Suzuki Vitara or Toyota RAV4 is more comfortable, they are all auto's. Keep in mind that driving in Grenada is on the left side. A downside is that during the rainy season that goes from June to November, roads deteriorate a lot and the government cannot repair them promptly. So, pay extra attention to the road conditions, plus to speed humps, plus to minivan drivers (there are lots of this kind of vehicles specially outside St. George) who don't always drive safely. But, don't panic, driving shouldn't be a problem. Remember to purchase your temporary driver's license: the rental company will help you with the processing. There is a list of all the rental companies also on the Grenada Explorer website.
Taxi's are a little more expensive than busses naturally. Before you get in one, ensure you agree the fare with the driver. There are a set of standard routes with known prices, but you will usually want to go the extra mile, which will cost a little more... Taxis from the irport cost a little more than elsewhere too but their prices are pretty much known, there is a page on the MBIA website that shows them.
If you want to go to any of Grenada's islands (Carriacou and Petite Martinique) you can either take a ferry, 90 mins to Carriacou (there is a daily service to the islands) or you can fly and be there in about 15 minutes.
They say mad dogs and englishmen go out in the midday sun (its a song) but some Grenadians cycle! Grenada is mostly quite mountainous and the roads are very rough in places but there is a growing interest in cycling, and it is possible to rent cycles. Some hotels even loan them to guests. Here are the contacts for cycle matters. They are both in the St Georges area.
Greens Bicycle Shop 1-473-435-1089
Danny's Bicycle Shop 1-473-443-3780
Finally, there is actualy a train, but its really a small truck towing trailers with seats that runs round the roads of St Georges... The Grenada Discovery train runs tours on days whenthere are a lot of tourists in town. You'll hear its bell as it approaches.