You are currently a grad student. What it means for you to be frugal today can be very different from what it means for you to be frugal later in life when you have more income/wealth.

And that aside, some people simply get more utility out of the car they drive than others. And that's not necessarily vanity (it could be different needs, different preferences, or whatever). So while someone may spend more on a car than you'd be comfortable spending (even if you were in the same financial position), you may spend more on some other activity or item because of your unique interests, preferences, and needs.

There are a lot of variables that you are overlooking. Just do what makes sense for you personally, and let others do the same, free from judgment and labels.