I drove from Alicante to Valencia over the hills rather than take the coast road. I have stopped for an overnight stay just over half way at Xativa. I chose Xativa because there was a reasonably priced and highly recommended B&B called Casa Aldomar as well as the fact that it was described as an old medieval town.
The accommodation is great and there are some impressive sights here. There is a 3000 year old castle at the top of the hill which I may walk to after a suitably fortifying lunch.