Among those killed was the SUV's driver, who authorities said had gotten out of her vehicle momentarily after the crossing's safety gates came down around her. She then got back in and was trying to drive forward when she was hit, they said.
"You have seven people who started out today to go about their business and aren't going to be making it home tonight," Gov. Andrew Cuomo said at the crash site in Valhalla, 20 miles north of New York City.
The northbound Metro-North Railroad train left Grand Central Terminal in Manhattan around 5:45 p.m. and struck the Jeep Cherokee about 45 minutes later. Cuomo said six people aboard the train were killed as well, making this crash the railroad's deadliest.
It was unclear how fast the train was going, but the maximum would be 60 mph, a railroad official said.
The train shoved the SUV about 10 train car lengths. Smoke poured out of the scorched front rail car, its windows blackened.
"This is a truly ugly and brutal site," Cuomo said.
Witnesses said they saw the flames shooting from where the crash occurred, in a wooded area near a cemetery.
Ryan Cottrell, assistant director at a nearby rock climbing gym, said he had been looking out a window because of an earlier, unrelated car accident and saw the train hit the car, pushing it along.
"The flames erupted pretty quickly," he said.
Passengers described a bump and said they smelled gasoline from the vehicle.
Around 650 passengers likely were aboard the train, including Justin Kaback, commuting home to Danbury, Connecticut.
"I was trapped. You know there was people in front of me and behind me, and I was trapped in the middle of a car and it was getting very hot," he told ABC News. "All the air was turned off so there was no circulation so it was definitely scary especially when people are walking by on the outside and they said, 'The train's on fire. There's a fire.'"
Passenger Stacey Eisner, who was at the rear of the train, told NBC News that she felt the train "jerk" and then a conductor walked through the train explaining what had happened. She said her train car was evacuated about 10 minutes later using ladders to get people out.
The other rail passengers were moved to the rear of the train so they could get off. Buses picked them up and took them to other stations.
All railroad grade crossings have gate arms that are designed to lift automatically if they strike something like a car on the way down, railroad safety consultant Grady Cothen said. The arms are made of wood and are designed to be easily broken if a car trapped between them moves forward or backward, he said.
Officials didn't comment on whether the gates were working properly. The National Transportation Safety Board said a team was being sent to investigate.
Metro-North is the nation's second-busiest railroad, after the Long Island Rail Road. It was formed in 1983 and serves about 280,000 riders a day in New York and Connecticut. Service on its Harlem Line was suspended between Pleasantville and North White Plains after the crash.
Metro-North has been criticized severely for accidents over the last couple of years. Late last year, the NTSB issued rulings on five accidents that occurred in New York and Connecticut in 2013 and 2014, repeatedly finding fault with the railroad while also noting that conditions have improved.
Among the accidents was a Dec. 1, 2013, derailment that killed four people, the railroad's first passenger fatalities, in the Bronx. The NTSB said the engineer had fallen asleep at the controls because he had a severe, undiagnosed case of sleep apnea.
Last March, the Federal Railroad Administration issued a stinging report on Metro-North, saying it let safety concerns slip while pushing to keep trains on time. Railroad executives pledged to make safety their top priority.
Associated Press writer Jim Fitzgerald contributed to this report.