The present paper aims to investigate whether, and if yes how, driving errors are correlated with the driving performance. To this end, both errors and performance are considered unobserved (latent) variables that are modeled using a structural equation modeling approach to reveal the critical factors that may affect driving performance, including driving error. The data come from a driving simulator experiment, in which 95 participants from all age groups were asked to drive 12 driving trials under different types of distraction (no distraction, conversation with passenger, cell phone use) in rural/urban road environment, in low/high traffic. Findings indicate that, neither road characteristics (area type, traffic conditions), nor the distraction sources examined (cell phone use, conversation with a passenger) have a significant impact on driving performance as driving error and driver characteristics. Finally, regarding driver characteristics, age, gender and driving experience have the highest impact on the overall driving performance.