Do you need a car in Granada? Most say no. But here is a question: do you plan to travel around Nicaragua and do you like to depend on others - i.e., taxi or others to take you around.
We own a car and a motorcycle since we have an active real estate business. Nevertheless, I would still own a car or at least a motorbike to allow me to drive around when I need something or meet up with friends, or go out for a meal. I certainly don't like to depend on others. If you own a car there are costs involved such as insurance and maintenance, but if you use the taxi service in and around town you will survive and save money.
On a side note: If you are retired you can also purchase a car tax and duty free so that's a great savings, assuming you applied for the pensionado program.