Spidey - I agree totally. I think in this particular case, my millionaire employer was a widower in his early 70s, didn't drive very much, and loved his old Bug. So it made sense for him to keep it.
Whenever I think of cheap vs. frugal I think of an acquaintance of mine whose car would sometimes run out of gas while he was driving around shopping for the cheapest gas station. He almost certainly spent more in gas driving around in his search than he saved by getting the lowest price, plus there's the inconvenience and time hassle of running out of gas. That for me is the very definition of cheap.