It would be a punishment for repeat offenders but the Government had not yet secured sufficient support in Parliament to get it through, she said today on TV One's Q&A programme.
Ms Collins, who got the nickname "crusher" for talking about it soon after she became a minister, said whether it went ahead would depend on support from other parties.
"It will allow a court to, in fact, order a car to be crushed for a recidivist offender," she said.
"They might be, if people keep reoffending and if a court orders it, and if we get the numbers in Parliament."
National is a minority government supported by ACT, United Future and the Maori Party.
Those support parties do not have to back the Government on anything except confidence votes, like the budget.
Ms Collins said the Labour Party talked about having to do something about boy racers but it had backed away from the car-crushing legislation.
The previous Labour government tightened the laws around boy racers but it seems to have done little to curb the problems of noise and dangerous driving.
"It's actually about the safety of the public," Ms Collins said.
"If we continue to have cars being used dangerously on the roads and innocent people get killed ... we should take action."
She said the police were doing a good job but they had to be supported.
Cars could be confiscated under current law and courts could order them to be sold, she said, but they were bought by other boy racers and the problem was recycled.
"It just flaunts the law, we got to actually deal with it," she said.
