A study done in the UK by MoneyExpert.com showed that almost 25% of parents have had to help their adult children with their car debt when they have become delinquent in their payments. The expensive reality of raising a child has now extended beyond childhood, into adulthood and threatens parents who are now in their 60’s to compromise their hard earned savings and ability to maintain their retirement and health care needs. The real irony is that adult children today are beginning to literally spend their own inheritance at the cost of compromising their very alive parents.

Of course all of this starts with the devastating news coming from the financial and mortgage industry of people over-borrowing for their homes or getting into loans for which they were not qualified in a lenient lending market. This crisis is not limited to the housing market: it also quickly became a problem with the way that we buy our cars.

In an article in the LA Times just 2 years ago, at a time when the economy was not yet as mired in foreclosures and repossessions as it has been in 2009, it was ominously pointed out that the amount of people who couldn’t make their car payments for 60 days was up by 20%. Additionally, the average car loans are being paid off over a much longer time period than in the 1980s and 90s. 45% of all car loans are for 6 years or longer. It is common that these longer loans are, in reality, for more than one car because many buyers drive cars for 4 years or less and then trade in that car, debt and all, for newer and more expensive cars. The debt owed on the old loan is rolled into the new loan and the cycle begins to spiral from there with some consumers these days paying for 3 loans or more in a single car loans and owing, in some cases, $30,000 in debt on a single car worth far less. This is especially true with car owners who were forced in the last months of recession to downgrade to a less expensive and more fuel efficient model while trying to lose a large monthly payment.

These statistics may begin to uncover a inevitable time bomb for the spoiled babies of the Baby Boomers but a similarly frightening reality is beginning to reveal how this affects the parents that raised these consumers who over expected so much for themselves!

So what is the solution for protecting our Gen X  dollars and, as importantly, our parent’s money? We should take a ticket from their book: our parents drove their cars for much longer after they were paid off and took on much shorter loans. It is may be common today to get financing on a car for 6-8 years but our parents usually had 3-4 year loans thus reducing the amount that they were paying in heavy interest. Additionally, new cars are still very expensive these days so foregoing a need to have a brand-spanking new car and instead negotiating a car that is 2 years old at least (so has lost the majority of it’s depreciation) is realistic for long term goals and financial stability.

Buying smart not only protects your hard earned money but the savings of your parents.