You both have good cars. But hers is better than yours.
Can I say that? I know that I can say "But her car is better than yours." Would it be too much to use two possessive pronouns in a sentence?
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Yes, it's fine. You can use multiple pronouns as long as they don't create ambiguity. In this case, there should be no ambiguity as yours must refer to the listener, while hers must refer to a third (female) party.
Even a sentence like the following is grammatical:
They both have good cars, but his is better than his.
To make this sentence unambiguous, though, you would have to point or gesture toward the people you're referring to as you say the pronouns aloud.
Really, it's just a matter of making sure you're communicating clearly.
I don't find any problem in using two possessive pronouns in a sentence. In fact, you can also include mine that will still make sense!
We all have cars, but mine is better than hers and yours.
I found several instances on authentic sites. This included a book as well which read...
“Who can say that yours are better than hers, or that hers is better than yours? They are as individual as we are. Both are good." - From On the Road Home By Eunice Long.