Mr Chambers died at the scene, while a travelling companion was last night being supported by police.
Senior Sergeant Jason McCoy said 10 officers, including a serious crash investigator from Invercargill and detectives from Dunedin, were piecing together the "traumatic" crash.
The investigation was still in its early stages, but it appeared the red 2012 Corolla was overtaking at the time of the crash, he said.
"Obviously, they've failed to see, or they haven't recognised, the no passing lines and they've crossed those, which is a fatal mistake," he said.
"It's an extremely bad decision that has consequences for a lot of people, some unfortunately forever."
The crash, about 20km south of Oamaru near the intersection of Waianakarua Rd, injured seven people, including the deceased.
The driver of the Corolla was taken to Oamaru Hospital by ambulance with moderate injuries, while the occupants of the two other vehicles involved - the Rural Post van and a black Nissan Tiida - sustained minor injuries.
Call for witnesses
Snr Sgt McCoy could not confirm the nationality of the occupants of the Corolla last night.
He called for any witnesses to the crash to contact police and thanked members of the public for their help at the scene.
Anthony Watson, of Oamaru, was heading north on the highway when he came across the crash about 5.15pm.
He did not see the collision happen, but he and his wife were among those who stopped to provide help before emergency services arrived.
"It was ... it was chaos," he said.
"It just seemed to take forever for the ambulances and everything to get there."
He said he comforted the driver of the Corolla while his partner was cut from the wreckage by emergency services.
A Fire Service spokesman said firefighters from Hampden, Oamaru and Weston attended the scene and used cutting gear to extricate the Corolla's passenger.
She was "heavily trapped" in the vehicle and it took more than an hour to free her, he said.
A St John spokeswoman said two ambulances, a doctor and a rescue helicopter attended the scene.
Snr Sgt McCoy said the incident provided a sombre reminder of the importance of sticking to road rules.
"Yellow lines are there for a reason," he said.
Welfare support services were available to crash witnesses and he asked anyone needing the service to contact police.
The road remained closed late last night and detours were set to remain in place until further notice.
However, the detour was not suitable for heavy motor vehicles.
It was too early to comment on what charges might be laid, Snr Sgt McCoy said.
"Obviously, inquiries are going on at the moment and any offences that are identified, we will look at charges being laid."
Educating rental car drivers
Rental Vehicle Association president Mark Righton said the company which rented the car involved in the crash was following a code of practice developed within the industry, effective since October 1.
The code sets out guidelines for rental car providers to follow when customers are from outside New Zealand, Australia or the UK.
The aim of the code is to establish standards and practices for operators to follow when educating and assessing visitor preparedness for driving in New Zealand.
"They are a signed-up member of the Rental Vehicle Association and are signed up for the code of practice," Mr Righton said of the company.
"It's about driver awareness and about education for the prospective drivers of cars."
He had spoken with the company, who he would not name, and said they had followed the code.
He said as far as he was aware, the driver went through the recommended assessment questions, there was a "keep left" sign inside the car, and information about New Zealand road rules was passed on.
He said rental vehicle businesses were taking the education of overseas drivers seriously.
"It's a combined effort working with a number of government agencies, local councils and the police to try and keep our roads as safe as possible."
Mr Righton said it was important to remain mindful that accidents happened with locals and with tourists.
"Our role is to make drivers as aware as possible of New Zealand road conditions and that they have the proper authority to drive."
Tourism Industry Association chief executive Chris Roberts said there was no indication that tourist drivers were more likely to crash than New Zealanders.
"In terms of the proportion of accidents, it is drunk drivers and speeders who are killing the most people on our roads, not visiting drivers."
Code of practice recommended assessment questions (yes/no):
•I am familiar with NZ road rules.
•I am familiar with the DriveSafe website.
•I have driven regularly in my home country in the past year.
•I feel well prepared to drive in NZ.
•This will be my first time driving on the left-hand side of the road.
•I have driven a vehicle of similar size or in the same transmission.
- with additional reporting from NZ Herald
