Miss Eaton had been visiting her parents at their Gladstone Rd South house, accessed via a private road that crosses the the main trunk line.
She left to drive to work about 3.30pm.
The 21-year-old said she was halfway across tracks before she noticed the train.
Acting on instinct, she put the vehicle in reverse and was able to back up enough to avert catastrophe.
Even then, the train ripped off the car's bumper and flung it 30m up the track as it passed.
Speaking 15 minutes after the incident, Miss Eaton said the enormity of how close she had come to being hit by the train was still sinking in.
"I'm pretty shaky."
She had never seen a train pass by the house during the day, only at night, and was not expecting one to be there, she said.
Senior Sergeant Steve Aitken, of Dunedin, said the train driver, who brought the train to a halt about 100m down the track, was also shaken after the incident, having expected to see Miss Eaton's vehicle in a "much worse" state than it was.
That Miss Eaton was not injured was testament to her quick thinking, but the incident could easily have had a much sadder ending, he said.
"This shows you can never be too careful and can never sure when a train is going to come. Here, we've got a very lucky situation, where we could have had a fatality."
People needed to be vigilant at railway crossings, even if they crossed them every day, he said.
