Mina Philip, 39, appeared in the Dunedin District Court yesterday and pleaded guilty to three charges of careless driving causing injury.
The court heard one victim suffered a broken wrist and another had a broken shoulder.
Philip's wife who was in the car with him received third-degree burns from the seatbelt and required blood transfusions.
On January 5, the couple arrived in Queenstown before driving towards Milford Sound.
When Philip took control of the rental car he was concerned about the steering and said at times he had to swerve to correct it.
They collided with a van carrying eight holidayers.
Philip told police he thought he hit a pothole or a rock which caused him to swerve into the wrong lane.
Counsel Rhona Daysh called the incident a "disaster" and said her client felt bad about ruining the victims' holiday.
"It's a terrible, horrible tragedy for both Mr Philip and his wife ... and obviously the passengers of the other vehicle," Ms Daysh said.
"It's devastating for everyone concerned."
Judge David Robinson said if Philip believed the vehicle was faulty, he should have returned it.
If the money was not paid immediately, Philip would instead spend 28 days in prison.
The defendant hoped to return home as soon as he could.