As a tow truck pulled the car off the line, the train inched through on its way back to the Taupo Quay yards.
Wanganui Fire Service station officer Bryan Coskerie said the driver of the car lost control on the bend.
"He hit the kerb and landed on his side partially on the railway line, as the steam train was coming along," Mr Coskerie said.
The male driver, the sole occupant of the car, was taken to Wanganui Hospital and was in a stable condition last night.
Wanganui police constable Sara Morriss said the driver failed a breath alcohol screening test at the scene.
- APN News & Media