Transport Minister Steven Joyce says he considered banning the use of hands-free cellphones while driving, but concluded they don't cause the same level of distraction as hand-held phones.
From 1 November it will be against the law for people to text or talk on their cellphones while driving. Those caught doing so will receive a $80 fine and 20 demerit points.
However, drivers will still be able to use hands-free devices and two-way radios.
Researchers say the ban on using hand-held cellphones in cars doesn't go far enough as the main source of driver distraction when using phones is the conversation itself.
Senior lecturer in psychology at Auckland University, Tony Lambert, says the Minister of Transport may have economic or pragmatic reasons for allowing hands-free cell phone use, but that will create the false impression that this is safer for drivers.
Associate Professor Sam Charlton from the University of Waikato's Traffic and Road Safety Research Group says when people are engrossed in conversation they take longer to react to hazards.
Mr Joyce has said allowing hands-free use recognises many business and trades people depend on being available on their cellphones for their livelihood. However, he is still urging hands-free users to pull over to make or respond to calls whenever possible.
Mr Joyce says how well the rule is working will be reviewed as part of a general review of road safety strategies which takes place about every three years. He told Morning Report there's already widespread acceptance within the community of a ban on hand-held cellphones while driving.
Automobile Association general manager of motoring affairs Mike Noon says the organisation still supports the use of hands-free phones in cars, but urges drivers to limit the amount of time they are distracted.
Telecom spokesman Mark Watts says the Government's ban goes far enough.
Anne McCabe, whose 18-year-old daughter was at the wheel and texting when she lost control of the car, killing her and her younger sister on a bridge near Levin, says if the cellphone ban is coupled with more education it can only be a good thing.
According to Government figures, between 2003 and 2008 there were 25 fatal car crashes in which the use of mobile phone was a contributing factor.