A parking assist system for a vehicle includes a rear backup camera and a control having an image processor that processes image data captured by the rear backup camera. The control, when the vehicle is driven forward into a parking slot and responsive to image processing of captured image data, determines a parking slot marker at a side boundary of the parking slot at which the vehicle is being parked. The system may include a display screen that displays images representative of the vehicle at a determined orientation relative to the determined parking slot marker so a driver of the vehicle can determine whether or not the vehicle is aligned in the parking slot. The control may determine a degree of misalignment of the vehicle relative to the parking slot and may generate an output to alert the driver that the vehicle is not aligned in the parking slot.