Objectives: To examine the driving variables that predict accident probability in mild dementia due to Alzheimer’s disease (AD), mild cognitive impairment (MCI) and healthy older control drivers in simulated driving. To compare the three groups in mean performance and in frequency of scores exceeding 1.5 SD from the mean. Methods/Design: Participants were 37 drivers with MCI, 16 drivers with AD, and 21 control drivers over the age of 52. Driving measures were derived from four rural driving conditions: moderate traffic without and with distraction and high traffic without and with distraction. The measures were z‐transformed based on the performance of 90 control drivers of different ages. Two unexpected incidents occurred per condition, requiring the sudden breaking to avoid an accident. Results: Drivers with AD showed significantly lower average speed, speed variability, greater headway distance, headway variability and average reaction time (RT) than control drivers. Drivers with MCI showed significantly lower average speed, greater headway distance and average RT than control drivers in the two conditions of distraction. No differences were found in accident probability. Drivers with AD had more deviant scores than both control drivers and drivers with MCI in most comparisons. Predictors of accident probability were average RT, speed variability and lateral position variability but MCI and AD status were not significant predictors in any of the regression models. Conclusions: Despite significant differences in performance, drivers with MCI and AD did not differ in accident probability from control drivers. An individualized approach of examining individual driving performance is recommended.