Chile Road Trip: The Lake District and Chiloé Island, from Puerto Varas to the Chacao Ferry

On the map, everything is surprisingly compact: from Puerto Varas, on the shore of Lake Llanquihue, you reach the Pargua ferry ramp in just over an hour on the Pan-American Highway, swapping snow-capped volcanoes for the green, misty hills of Chiloé within the same day. It is one of the few combinations in South America where two such different worlds fit into a single itinerary without an endless transfer day — all with the same rental car picked up at Puerto Montt airport.

The contrast is what makes the trip. On the mainland, the Lake District (Los Lagos) offers immaculate paved roads, postcard views of Osorno volcano and an almost Bavarian atmosphere inherited from nineteenth-century German settlers. On the island, Chiloé sets its own pace: fishermen, tides, wooden churches, steaming curanto and gravel tracks running out to the Pacific. Staying in Chile from start to finish also keeps the rental simple: no border to cross, no customs paperwork — just a ferry to catch.

Puerto Varas ticks every base-camp box: accommodation for every budget, restaurants, petrol stations and, above all, a perfect setting on the shore of Lake Llanquihue, facing the near-perfect cone of Osorno volcano. Allow two to three days here to explore without rushing. The drive up Osorno is the headline excursion: a paved road switchbacks up to the ski lifts of the small ski area, from where the view takes in the lake, Calbuco volcano and, on a clear day, a good chunk of the region.

The same day or the next, continue to the Petrohué falls, where the turquoise water of the Petrohué river churns through channels of dark lava rock, then on to the strikingly emerald Todos los Santos lake, the historic starting point of the lake crossing to Argentina. The road hugging Lake Llanquihue from Puerto Varas is beautiful from end to end and an easy drive.

Don't skip Frutillar, half an hour from Puerto Varas on the lake's western shore: this village founded by German settlers has kept its half-timbered wooden houses, manicured gardens and its tradition of kuchen (cakes) served in tea rooms. It is the perfect spot for a quiet late afternoon facing the volcano, before getting ready for the crossing to Chiloé.

Here is the good logistical news of this itinerary: the ferry across the Chacao channel between Pargua (mainland) and Chacao (island) is disarmingly simple. The crossing takes about thirty minutes, departures run very frequently all day long, and there is no booking to make: you turn up at the ramp, join the line of cars, pay on the spot and drive on board. Even in high season, the wait is usually reasonable, as the operators run several vessels in parallel.

With a Chilean rental car, boarding is normally no problem at all: you are staying within Chile, so this is not a border crossing. To be safe, still check when booking that the contract explicitly allows driving on Chiloé (most rental companies in Puerto Montt mention it, since the crossing is one of the region's classics). A quick look at the contract will spare you any argument if something goes wrong on the island.

A word about the famous bridge: a suspension bridge over the Chacao channel, often billed as the future longest in South America, has been under construction for years, with repeated delays. Until it opens to traffic, the ferry remains the only way to bring a car onto the island. Check the state of the project before you travel, but don't build your itinerary around it: at the time of writing, you still reach Chiloé by ferry — and honestly, that half hour on the water, surrounded by seabirds, is part of the trip.

Chiloé unfolds along two main threads. The first is its unique religious heritage: sixteen wooden churches, built by local communities using shipwright carpentry techniques, are listed as UNESCO World Heritage. Those of Castro, with its yellow-and-purple façade, and Achao, on the neighbouring island of Quinchao, are among the most striking. The second thread is Castro's palafitos: these colourful houses on stilts, feet in the water at high tide, have become the island's signature image — the Gamboa and Pedro Montt neighbourhoods offer the best viewpoints.

On the Pacific side, Chiloé National Park, reached via the village of Cucao, protects dunes, peat bogs and a dense, moss-draped temperate rainforest crossed by well-maintained trails. This is no ordinary scenery: a study by Juan Armesto and co-authors published in 1998 in the journal Science ranks the temperate rainforests of southern Chile, including those of Chiloé, among the last primary temperate forests on the South American continent and identifies them as a global conservation priority (available via Google Scholar: scholar.google.com/scholar?q=Armesto+conservation+targets+South+American+temperate+forests+Science). Walking beneath these trees means moving through an ecosystem that is rare on a planetary scale. South of Cucao, the hike to the Muelle de las Almas, the wooden "dock of souls" suspended above the cliffs, has become a must — allow a few hours and wear shoes that can handle mud.

Finally, you cannot talk about Chiloé without talking about food: curanto, the traditional bake of seafood, meat and potatoes in a pit lined with hot stones (or in a pot, the pulmay version), and milcao, a grated-potato cake, can be tasted all over the island, notably at the Dalcahue market and in Castro's cocinerías. It is simple, generous and deeply local.

The island's backbone poses no problem: Route 5, the continuation of the Pan-American Highway, is paved from the Chacao ferry all the way to Quellón in the far south. However, as soon as you leave this axis to reach the churches on the peninsulas, the Pacific coast or the fishing villages, you quickly switch to secondary roads of dirt or gravel — drivable in a regular car in dry weather, but demanding a lighter right foot, especially after rain.

And rain there is: Chiloé and the Lake District live under a very wet oceanic climate, with precipitation possible year-round, even at the height of the southern summer. Drive with your headlights on, increase following distances and accept that a shower may crash the finest of days — it is also what makes the island so green and so photogenic when the sun returns.

Our recommendation fits in one sentence: two to three days for the Lake District, two to three days for Chiloé — a full loop of five to six days from Puerto Montt. Any less and you will spend your time behind the wheel; any more and you can add the island's quieter peninsulas (Quemchi, the islets of the inland sea) or an extra slow day on the shore of Lake Llanquihue.

This circuit also slots neatly into a longer journey towards Patagonia. You have two options to continue to the Carretera Austral: either drive down the island to Quellón and board a ferry that reaches the mainland along the southern highway (sailings are far less frequent than the Chacao ferry — be sure to check schedules and vehicle availability before setting off), or head back via Chacao and Puerto Montt to tackle the Carretera Austral from its official starting point. Either way, make sure your rental company allows the Carretera Austral, which is often subject to conditions.