The 15% funeral discount also applies to the family members and close relatives of the elderly, who have surrendered their licences.
The country recently has seen a spike in the number of accidents involving the elderly, with some involving drivers confusing the brakes and accelerators.
The funeral service company - Heiankaku Co., in Aichi Prefecture, started the discount offer from March 1 at its 89 funeral homes within the central Japanese prefecture for people who hold proof, issued by police, that they have returned their licenses, Kyodo news service reported.
Elderly drivers aged 75 or above were responsible for 13.2% of fatal traffic accidents in Aichi in 2016, the report said.
Besides, elderly drivers confusing the gas and brake pedals, another leading cause of accidents was the senior citizens mistakenly putting the vehicle into reverse.
According to the Japan Times, it is estimated that there are more than 17 million drivers aged 65 or older in the country.