A beat up car. A beater. Also known as a POS. Generally, puddle skippers are large-body American sedans from the late 70's through the early 90's, although notable exceptions would be most Volkswagen Rabbits, Quantums, or Golfs, and anything made in a former East Bloc country. Puddle skippers usually emit some kind of smoke, are missing one or all of their hub cabs, and have a stereo worth more than the Blue Book value of the car itself.
"Hey, did you see that new car Jim Bob bought?"
"What is it?"
"A 1984 Caprice Classic, metallic blue!"
"Wow. What a total puddle skipper!"