Could this 'trouble" be related to his vision or could dementia be setting in?

Difficulty driving around a familiar area could be caused by vision loss or by dementia. In order to distinguish between the two it is important to know what type of difficulty your father is having. If he is losing his way in familiar areas or forgetting how to get home, that may suggest dementia. If on the other hand he can't tell whether there's a car parked in a shady area or which light in the traffic signal is on, that could suggest loss of vision or loss of contrast sensitivity, both of which can be caused by macular degeneration.

The first step would be to have his vision assessed by an ophthalmologist. If his visual acuity is not sufficient to drive legally in your state, then transportation alternatives should be explored, for example a community senior transportation system, a cab, or a little electric scooter that goes at walking speed on the sidewalk. The last thing you want your father to do is be isolated at home.

If his vision is sufficient to drive in your state, then I would suggest trying a yellow or plum tint in glasses that fit over his prescription glasses and wrap around the sides to reduce glare, which are available through  NOIR medical or 800-521-0746. You can also help him identify the circumstances that cause him trouble and avoid them, for example maybe he shouldn't drive on dim, rainy days, at dusk, or at night. If he is still uncomfortable, whether he's legal to drive or not, I would recommend he discontinue driving. In that event, again, it is very important for you to explore transportation alternatives.