Renting a 4WD in Luganville is essentially mandatory for exploring the island. Many roads outside town are unpaved and in poor condition, particularly during and after rain, and a standard car will leave you stranded before you reach most of the interesting places. Several operators in Luganville rent vehicles; book ahead in the busier months. Driving is on the right.
Within Luganville itself, taxis are available and cheap. The town is small enough to walk across in 20 minutes. For day trips to places like Champagne Beach or the blue holes, either hire a vehicle or join a day tour through one of the dive operators in town.