Neighbour Janet Taylor, whose fence was damaged, said the baby looked to be about 1 year old and was in a car seat.
"I understand a passerby went in a window or the boot to rescue the children," she said. "Somehow the parents crawled out of the car."
The adults and baby were taken to hospital by ambulance and the 6-year-old was taken to Wellington Hospital by the Palmerston North Rescue Helicopter.
The Serious Crash Unit remained at the scene until 3pm.
A blood sample was taken from the driver and alcohol was being considered a factor, said Wellington Police shift inspector Dave Rose.
Meanwhile, firefighters cut the roof from a car which crashed down a bank in South Taranaki yesterday morning.
Julian Burn said the Taranaki Rescue Helicopter was called at 9.26am to a boggy location off Te Roti Rd, north of Normanby. The car, driven by a 67-year-old woman, had gone 30m down a bank and landed on its wheels in a paddock.
Police said the driver received head, spine and rib injuries and was in a serious but stable condition.
The driver, described as alert, was cut out and treated before being flown to Taranaki Base Hospital.
SH3 was closed for a short time after the crash. Police were investigating the cause.