Witnesses said the family was travelling to Victoria when they noticed smoke coming from the bonnet of the vehicle.
They reportedly scrambled scrambled to safety before the car fully caught alight.
The car was destroyed by the blaze.
All five occupants of the vehicle were uninjured, Bowral police inspector John Klepczarek said.
UPDATE 10:05AM: A car fire closed one lane of the Hume Highway at Berrima this morning.
Emergency services responded to reports of a vehicle on fire at on the Hume Highway at Berrima near Old Mandemar road.
NSW Ambulance responded to reports of the incident at 7.10 am today, Wednesday, January 10.
The five people travelling in the car were out of the vehicle by the time paramedics arrived.
A NSW Ambulance spokesperson said the patients were assessed upon arrival and "were not transported [to hospital]."
Police and NSW Rural Fire Service were also on scene.
NSW Live Traffic reported that Southbound traffic was heavy, with queues of up to 2.5kms.
EARLIER: Police, the rural fire service and ambulance attended the scene of a vehicle fire on the Hume near Berrima this morning.
A NSW police spokesman said the vehicle was south bound on the Hume Highway.
The spokesman said the fire was reported at 7:30am on Wednesday morning and caused the road to be blocked off for a short time.
BERRIMA: All southbound lanes have reopened & traffic's returning to normal on Hume Mwy after an earlier car fire at Old Mandemar Rd.— Live Traffic NSW (@LiveTrafficNSW) January 9, 2018
One south bound lane is currently open.
More to come.