The procession of cars had been following four-wheel drives through the area.
The hatchback had tried to go around a red Falcon, which stalled in front of them while travelling across the flooded part of the road.
There is a huge contingency of emergency workers on the scene, police said.
Three elderly people died because of flood waters on Tuesday in Dungog.
A woman and two men reportedly died in their homes as water surged through the small town after more than 300mm of rain fell in 24 hours.
NSW Premier Mike Baird said areas such as Dungog and Maitland, and parts of the Central Coast, would be declared natural disaster zones.
-AAP