When the conditions pose a hazard and potential liability, it’s best to replace the entire driveway, McFarlane added. DOLLARS AND SENSE. Cost of demolition, removal and replacement of an existing asphalt driveway runs between $2.50-$5 per square foot, McFarlane said.He added that if a large area is involved it may bring the unit price down.hen the conditions pose a hazard and potential liability, it’s best to replace the entire driveway, McFarlane added. DOLLARS AND SENSE. Cost of demolition, removal and replacement of an existing asphalt driveway runs between $2.50-$5 per square foot, McFarlane said.