My car (the one we'd sell) is a 2005 Toyota Corolla with ~108,000 miles on it. My husband's car (the one we would keep, as we often need the size) is a 2009 Toyota Matrix, with ~110,000 miles on it. No loan on either.
Unfortunately I kind of expect them to both die around the same time, so keeping one to replace the other would be a very temporary situation, especially because my husband is a musician and often needs to put the seats down on the Matrix to transport equipment - not possible on the Corolla.
But when I tell people they always raise concerns like -- what about if your dog needs to get to the vet ASAP and DH is far away with the car?? what if you get hurt and can't bike at all?? That's thinking driven by fear, of course, which isn't very mustachian but it is very effective in scaring me!
The only real unknown is whether he will get to stay at this school. I think probably, unless he absolutely hates it in which case he might ask for a transfer within the county. I don't think he would agree to a long commute unless things were REALLY bad. It's also possible they might move him around without consulting him first - something I think it also unlikely?
You need to wait for 2 or 4 or 6 months, and see how this job pans out first. Make sure everything is okay, and he's happy there, and the commute works out well. You might hit some bumps or see that his commute is not as easy as he thought (you mentioned it was a bit more hazardous than yours)
THEN
You also need to consider how much you actually will get for a 10yr old corolla. It may not be a lot. If you're only going to get a few thousand out of it, is it worth selling it? This is where i would say keep it, if its only costing you $500 a year.
You're looking at selling a car most MMM people would drool over. Reliable, fuel efficent, and low mileage. and despite being 10 years old, corollas are known for being reliable little cars which is why they're often desirable. What would happen if your matrix got in an accident tomorrow? At least you'd have something available while you looked for a replacement
There is no loan against it
Its not a ferrari, or a porsche, or god forbid a gas guzzling half ton truck
You're not driving an hour each way to work and back with it
You're already biking and reducing your commute as much as possible
RELAX......You're already on the right track. What works for MMM is not the ONLY absolute way to do things either.
This may not be very MMM, but i look at the fact if i sell it and get almost nothing for it, i'm NOT much farther ahead than keeping it, if its not costing me much in insurance and maintenance (and barely driving it, it won't wear out tires, oil, etc etc near as fast as others will) I currently have a 1998 corolla and its still going strong. The few repairs i have been doing are still way way less than it would ever cost to actually have a new loan on a car. I have been hesitant to sell it and upgrade partly for the fact its worth almost nothing now, despite being a little reliable workhorse.
Even in the future, if he decides to drive to work, and you can't bike due to an injury, it sounds like he would be able to drop you off on the way to his work quite easily. And as for the fear mongering people, tell them that's what a cab is for. Its going to be so rare its not really you're highest priority right now.