The driver, Georgia Peaches Smith, did survive and has been sentenced for careless driving. She also admitted an unrelated charge of breach of community work.
Lawyer Megan Boyd said Smith suffered a broken collarbone and knee injuries in the crash, and the vehicle was written off.
"Smith also lost her job," Ms Boyd said.
Given that she had already been through "a great deal" and also suffered from anxiety, the lawyer sought a conviction and discharge.
According to the police summary of facts, about 11.15am on March 15, 2019, Smith was driving north on State Highway 7 at Totara Flat.
As she turned a corner and straightened, heading towards the level crossing, it was possible on several occasions to see a train approaching on the left.
The train engineer observed the vehicle heading towards the crossing and as it did not appear to be slowing down, he sounded its "very substantial horn" as a warning.
However, Smith continued north at an estimated speed of 100kmh and crashed straight into the side of the locomotive, near the front at the engineer's window.
As a result of the impact, the vehicle was turned sideways and dragged about 40m north, where it detached and flipped upside down into a drain.
The train consisted of 30 wagons, weighing about 540 tonnes and was 465m long. The heavy steel locomotive was substantially damaged, while the vehicle was almost totally destroyed.
Police said it was remarkable Smith's injuries were not immediately life-threatening.
Diagnostic checks carried out by KiwiRail concluded that the warning lights and bells at the crossing were fully operational leading up to and at the time of the crash. All signs, including painted road markings and road signs, were in place and visible.
In explanation, Smith told police the lights and bells were not working, and that she drove straight into the side of the train. Smith told police she had looked, but did not see the train until she crashed into it.
Community Magistrate Sally O'Brien said Smith caused serious damage to the train, herself and her own car.
KiwiRail was seeking reparation of $171,000.
Magistrate O'Brien said the train driver at the time believed it was a "fatal".
She told Smith it had been very hard on the engineer, as he had initially thought Smith had died in the crash.
"It is difficult to understand what was going through your head at the time (but) there was a high degree of carelessness, which nearly cost you your life."
Magistrate O'Brien said there had been a significant impact for Smith, including her physical suffering, ongoing mental health issues, her eyesight was affected and she lost her job.
The magistrate said she believed Smith was "brave" to take part in the restorative justice process with the train driver.
"He (the train driver) described to you how the crash affected him and how he thought you had died and was thankful to be sitting around the table with you. You apologised to him and at the end of the restorative justice you hugged each other.
"This was a very valuable process for both of you."
Magistrate O'Brien said she was not going to impose a significant penalty as she believed Smith had suffered more than enough. She said the offending was careless, but not "reckless".
The magistrate also said she did not expect Smith to pay the $170,000 reparation sought.
Smith was convicted and ordered to pay reparation of $2500, at $10 per week for the next five years, and told to undertake a driving improvement course.
