A rear backup system for a vehicle includes a rear backup video camera and a display device including a video display screen operable to display video images viewable by a driver of the vehicle. When a transmission of the vehicle is shifted into reverse gear to commence a backup event, video backup images derived from image data captured by the rear backup video camera are displayed at the video display screen of the display device. Display of the video backup images continues after shifting of the transmission out of reverse gear. Display of the video backup images at the video display screen ceases once a threshold condition is met. The threshold condition may include a threshold period of time elapsing after the transmission has been shifted out of reverse gear. The rear backup video camera continues to capture image data at least until the threshold condition is met.