Upvote:3
I am answering my own question since I have already done the trip. Unfortunately I cannot shed the light to all the answers, but at least I can answer some of them.
I have rented the car through Europcar. I experienced no issues neither crossing the border nor driving in the Northern Cyprus. I have bought insurance at the border and I think the price was approx 30 euros.
As the comment to this answer points out, it is a good idea to still check up with the rental agency if the driving is allowed. I remember calling Europcar branch I was renting the car from. And they confirmed that they do not restrict driving in the North.
I did not experience any issues driving /parking -wise with cyprian plates. However, as far as I recall driving in bigger cities (e.g. Girne) is a bit more chaotic than in Republic of Cyprus.