We rented a car in Puerto Montt, a medium-size city at the southern end of the lakes district, and drove north. It's about a 15 hour drive to Santiago and we did it over 2.5 days.
The Lake District is in the central valley of the country and it's where many Chileans go to do outdoor sports and trekking.
We stayed on the Pan-American Highway and didn't veer off the road much to look at the lakes. The sights from the highway were similar to those in California, except for the big old volcano forever in the horizon.
We stopped in Valdivia which is increasingly becoming a tourist town especially for those coming from southern Argentina. Still lovely with the lake and German influence.
We spent the night in little Osorno, which is not known for much, but it actually has some charm. We took the free city tour – 3 hours! – of this little town. It was great fun, if one hour too long. The tour stopped at very mundane places ("here is a gym in the city") and reviewed when certain stores opened and closed. One long-time resident joined the tour and tried to challenge the young tour guide's knowledge of the city. She stayed in the back and talked to us about the different sights. Some listened to the main tour guide, others to the renegade.
One observation: driving a car taught us that many streets in Chile are one-way! It's hard to drive around a city even if you know how to walk it. I'd say 50-75% of the streets are one-way. Some streets even turn into one-ways at different hours of the day…which makes Google Maps less useful. Wonder why this is…