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Basque country is a small region. Most tourists either stay at San Sebastian or Bilbao or split the time evenly between San Sebastian and Bilbao and explore the coast and wine country as day trips.
You do not need car between towns and to explore Bilbao and San Sebastian as public transportation is fairly efficient. For instance, the airport bus from Bilbao will take you directly into San Sebastian in about an hour.
Renting a car is recommended to do the day trips. If you are staying for four days in San Sebastian, you are better off renting the car from day 3 when you are ready to do the day trips.