The rates you are seeing ($300/day guide only or $600/day guide w/car (+ meals & lodging) are about the average. You can certainly rent a car, self-tour, and hire a guide for the day in each area you want to go. However, you can miss a lot by not having the guide with you all the time. For example, Ariel would be explaining things as we drove & telling us what to look for when we got to a location.
One day we were driving in the Golan Heights & he saw an encampment of Israeli tanks in a field & he pulled off the road in to the encampment, gave them the "secret handshake" (he knew it from being in the army) & we were able to talk to the soldiers, take pictures (with the proviso that we only take close up pictures that would not show the total number of tanks in the encampment) - if you were self-touring you would never be able to do that.
However, we were two couples traveling together so we were splitting the $600/day expense. Also, he was living near Jerusalem (Nov. 2011) so when we were there for 3 days we had no lodging/meal expense for him (I know he & his family recently moved). For us, as first time visitors, it was worth the expense, but it's a personal decision.
Last edited by rubesl; Jan 24, 2013 at 1:53 pm