In the question Can I make my own RP1? the comments talk about using ethanol and water as rocket fuel. That made me wonder how well easily availible ethanol fuel for cars such as E85 (85% ethanol 15% gasoline) would work. Would such a rocket run into the same problems as a pure kerosen rocket or would it work well for a simple launcher?
Which one? Which supplier, which brand, which set of additives, what content of impurities?
That matters. This is why rockets fly on RP-1, not on JP-1 kerosene - because the standard for JP-1 is crap, and JP-1 can be pretty much anything, while RP-1 restricts contents of substances that adversely affect combustion stability and regulates contents of substances that affect combustion process, so that it's repeatable.
Ethanol is not a very desirable fuel due to high combustion temperature accompanied by moderate pressure of the exhaust - the nozzle runs very hot while not producing all that much thrust. This can be managed by other additives and E85 could be better than pure ethanol (though likely worse than RP-1) - providing it's standarized to a regime as tight as RP-1 kerosene; it doesn't matter so much what the standard is, only that it's tight so that if a test article engine is made to work reliably on one batch on the fuel, the production engine will work exactly the same on another batch.
In short, with existing E-85 you'll run into the same kind of problems as the early rocket engineers ran into with JP-1 jet fuel. There are detergents, there are denaturing additives, pigment, all that crap that's mostly neutral for a car engine, but your rocket - even if you don't clog the injectors or regenerative cooling pipes - will simply vary in parameters from batch to batch. And so, even if your rocket flies, you'll have a lot of headaches assuring it flies where you want it to!
It could work, but for commercial purposes, it's not really economical. The energy density of E85 is much lower (34.7% lower per unit volume, and 26.9% lower per unit mass) than diesel (which is basically kerosene, which is basically RP-1....sorry I couldn't find reliable energy numbers for RP-1). Which basically means that you need a larger (and therefore heavier) launch vehicle to carry the extra fuel you'll need to get the needed delta-V for orbit. Engineers continually aim for the best tradeoff of energy density vs. reliability, and complexity of the engine, tanks, and plumbing.
And even though ethanol burns hot (1920°C), the previous answer's assertion that it's hotter than RP-1 is incorrect based on my research, since the RP-1 combustion temperature is 3396°C; which is actually cooler than hydrogen at stochiometric mixture -- 2800°C.