Dropping down to a 1-car family will offset much of the extra insurance, property taxes, and depreciation from driving a late-model vehicle. Plus, barring accidents or thefts, you are set for the next 10-15 years in terms of cars. I'd focus on other areas.
As a 1-car family, you'll find yourself worrying more about reliability. So if you decide to own cars in the 9-12 year old range, you'll trade more frequently. Each of those trades has a cost in terms of sales taxes, time and trouble, bid-ask spreads, and the risk of getting someone's lemon.
Owning a car in the 4-10 year old range costs more, but you can go longer between trades. Go to Edmunds.com and look up their TCO (total cost of ownership) to see if the difference is worth it to you. Personally, I'd think about your Corolla about as often as you think about your dishwasher. If you're going to own one car for the next 10 years, your current car is almost ideal.
Also, don't beat yourself up over the sunk cost fallacy. The $10k in depreciation you've experienced in 3.5 years is not a relevant factor looking forward.
3.5 years is unfortunately within the normal lifespan range of a small lead-acid battery. I'd chalk that up as a maintenance issue (and a reminder that my 2011 Corolla's battery is the same age - uh oh).
If DH wants an antique Porche project car, perhaps a side gig could be used to earn the dough (makes it fun too). However, it's tough to own a project car if you don't have a garage, so even if this hobby was financed at no cost to retirement savings, it could come back to bite you if the next thing he wants NEEDS is a suburban tract home with 2-car garage. Expect to spend at least $800 on tools to maintain the thing, and check the insurance rates before giving him the green light on this hobby.