Two crews from the New Zealand Fire Service leapt into action, giving the students valuable experience in collaborating with other emergency services.
One of the 'victims', third year student Albertine Ongley, 24, had a simulated gash to her face and was drenched in fake blood.
"Real crash scenes are nothing like you see on TV dramas," she said. "The noise and confusion is incredible, to the point it is almost surreal.
"The experience of playing a victim is invaluable to us, as it gives us a better understanding of how trapped people might be feeling when we have to do this for real."
Stuart Cook, a lecturer in paramedicine at AUT, said it was the first time a crash like this had been staged in the city centre.
"I think people were pretty shocked when they saw the frantic level of activity that goes on when there is a bad car accident," he said.
"But it is good for the students to realise the stress of dealing with a situation like this and the importance of working alongside other agencies.
"It is also important for them to experience what it is like to be in a patient's shoes."