Police believe the trio were killed instantly when their car and the truck collided head-on on the Newell Highway, five kilometres south of Narrandera, about 9.50am.

"The car has been completely destroyed," a police spokesman said.

The driver of the truck did not appeared to be seriously injured, but was taken to Narrandera hospital, an ambulance spokeswoman said.

The Rural Fire Service had also been called to the crash, as the truck - which was carrying cattle feed - was leaking fuel after the crash, the police spokesman said.

There were no further details on the cause of the crash.

Last month the RTA reduced the speed limit on the highway from 110km/h to 100km/h for safety reasons.

"In the past five years, 69 people have been killed on the Newell Highway, including 11 this year (2009) alone – and that is 69 too many," it said in a statement announcing the change.

But a local motel owner said the stretch of road where the accident occurred was not an accident hotspot.

"It's all pretty straight and flat out here," she said.

The latest casualties bring NSW's holiday season road toll to 26, the highest in the country. Truck driver David Carolan and Ulladulla man David Bridge and his two daughters Makeely and Jordon died after a fuel tanker and the Bridge's Subaru collided last week on the Princes Highway near Batemans Bay.

Newell Highway has been closed in both directions. Northbound traffic on the highway was being diverted via Kidman Way to the Sturt Highway, and southbound traffic via Sturt Highway onto Kidman Way, the RTA said.