A woman who had been working nearby said that she understood that the car had travelled through the air a considerable distance before hitting the ground and then bouncing back up into the school bus, which parks at the spot when it is not transporting local children.
She said the incident was the talk of the town, with those first on the scene finding that the driver had miraculously walked away.
Police confirmed to the Herald that the driver had been found and there were no serious injuries to report.
Locals reported on Facebook that they had heard the car "screaming" along the road before the crash.
A spokesperson from Warkworth Taxi and Bus Services, which runs the bus service, told 1News the crash happened at around 5.30 in the morning.