Our group has previously demonstrated that peripheral motion contrast threshold (PMCT) is significantly associated with self-reported accident risk of older drivers (questionnaire assessment), and with Useful Field of View® subtest 2 (UFOV2). It has not been shown, however, that PMCT is significantly associated with driving performance. Using the method of descending limits (spatial two-alternative forced choice) we assessed motion contrast thresholds of 28 young participants (25–45), and 21 older drivers (63–86) for 0.4 cycle/degree drifting Gabor stimuli at 15° eccentricity and examined whether it was related to performance on a simulated on-road test and to a measure of visual attention (UFOV® subtests 2 and 3). Peripheral motion contrast thresholds (PMCT) of younger participants were significantly lower than older participants. PMCT and UFOV2 significantly predicted driving examiners’ scores of older drivers’ simulator performance, as well as number of crashes. Within the older group, PMCT correlated significantly with UFOV2, UFOV3, and age. Within the younger group, PMCT was not significantly related to either UFOV® scores or age. Partial correlations showed that: substantial association between PMCT and UFOV2 was not age-related (within the older driver group); PMCT and UFOV2 tapped a common visual function; and PMCT assessed a component not captured by UFOV2. PMCT is potentially a useful assessment tool for predicting accident risk of older drivers, and for informing efforts to develop effective countermeasures to remediate this functional deficit as much as possible.