Stopping in Madrid for 3-4 days as part of a big European driving holiday and am looking for affordable accommodation options for a family of 5, 2 adults and 3 young children (4, 6 & 8).
I would recommend to check booking.com for studio type accommodations. You will be able to find many studio type hotels. And some of them are also affordable and comfortable.
If you were not more than 3, I would recommend San Vicente (http://www.booking.com/hotel/es/san-vicente-10.en.html). It is very close to the sightseeings and also in a good location (next to plaza de espana).
They might have a larger studio than the one we stayed.
Also I would recommend to check car parking facilities of the hotels you will be booking.
Let me know if you have more questions or would like to learn more about Madrid.
Enjoy your trip, about 5 years ago