A parking assist system for a vehicle includes a camera and a display operable to display video images of an exterior scene derived from image data captured by the camera. A controller, when operating in a first or parking space locator mode, adds an overlay to the displayed video images. The overlay includes (i) a polygonal representation of the vehicle and (ii) a linear overlay extending along one side of the polygonal representation of the vehicle. The polygonal representation is offset behind and laterally from the vehicle. The controller is operable in the first mode while the vehicle is being driven by a driver of the vehicle and, with the overlay added to displayed video images, the driver maneuvers the vehicle to position the polygonal representation at a displayed target parking location. The linear overlay assists the driver in parking the vehicle at the target parking location.