iPhone tracking my location

It does work for me and I've never used CarPlay. It requires pairing to either CarPlay or Bluetooth.

My iPhone and car are paired via Bluetooth (which I only did for calling features).

If you are paired with Bluetooth, the following from Get directions to your parked car in Maps on iPhone - Apple Support may help:

If you don’t see your parked car in Maps

Make sure your iPhone is paired to CarPlay or Bluetooth in your car, then make sure of the following settings:

• Location Services is turned on in Settings  > Privacy.
• Significant Locations is turned on in Settings > Privacy > Location Services > System Services.
• Show Parked Location is turned on in Settings > Maps.

Note: Your parked car isn’t marked at a location where you frequently park, like at home or work.

Turn off the Parked Location in Settings > Maps.

Also see:  Get directions to your parked car in Maps on iPhone - Apple Support

You need to paired to CarPlay or to your car Bluetooth for the option to show your parked location, but I don't know if you need to be paired to either just to turn this option off.

On my phone, if I tap Settings, then tap Maps, then scroll all of the way down on that screen, the next to last item is "Show Parked Location."

If it is not there, what iOS version do you have installed? (Settings > General > About)

FoxFifth wrote:

You need to paired to CarPlay or to your car Bluetooth for the option to show your parked location, but I don't know if you need to be paired to either just to turn this option off.

My phone has never been paired to CarPlay and the option is available on my phone and able to be turned off.

Most likely. Just providing a data point.

I'm really sorry it's not a feature that can be made to work some other way (dongle?) than with CarPlay. I've made it a habit for years to park under light poles in huge parking lots because I tend to lose my car. Current car is bright blue because I got tired of not being able to find the previous silver one.

Mine has never been paired with CarPlay either but it is paired via Bluetooth -- but I doubt that it matters (i.e., I suspect that the option in Settings should still be available).

Ah, well, sadly, my car doesn't have BT at all. Unless you count the Echo Auto (which is very nice and was far cheaper than the extras package for the car that included BT).