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Santa Monica or Newport Beach?

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Going to spend a week in LA area this summer July or August (2 adults and a 16 year old). Looking at Santa Monica or Newport Beach. We like to be near the ocean and like areas that offer shopping,dining and things to do that you can walk to. We have been to San Diego and San Fran so we thought we'd like to try LA area. Any recommendations to which is better or are there other beach communities in the area you would choose. We will have a car. If we go to Santa Monica we will probably fly into LAX but may use John Wayne if we go to Newport Beach.

A second question is renting a car at LAX. I have read that LAX is one of the worst airports to rent a car out of due to volume of traffic and finding your way out of it to your destination. I generally don't mind driving in big cities but would like to know your experiences. We will probably do a Sat to Sat so we would avoid the week day commuters.
Thanks for any insight you can provide.

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