La cáscara guarda el palo

La cáscara guarda el palo
 

This was said with reference to the car I drive, which happens to look rusty and beat-up on the outside but is in good mechanical condition. The only explanation I could get of it was that it's something you say about a person who doesn't bathe regularly, so I wonder how would that apply to an old car? I thought of perhaps "It's what's on the inside that counts" (?)

The bark protects the tree.

As you have already noted, the saying is usually something you'd say to someone who doesn't bathe regularly, or what those who don't bathe regularly like to quote to support their reluctance.

In the case of your car, I think the analogy is that the cáscara (carrocería) of the car, although far from pristine, protects the palo (interior-the part that runs well).