Woods, in New Zealand to attend caddie Steve Williams' wedding, accepted Williams' challenge to drive in the event.
'I've done other things. I've thrown a baseball a few times and thrown a couple of coins here and there,' Woods told a news conference in Auckland on Thursday.
'This is a bit more physical.'
Williams is an enthusiastic racer when not working for Woods and is the New Zealand champion in modified saloon cars.
He said Woods will head one of two five-man teams in the charity event, a 12-lap competition at Huntly. Funds raised in the event will go to the Steve Williams Foundation, which provides coaching and educational opportunities.
Woods said bumping between cars on the tight and narrow circuit was 'part of the deal' and his insurance was 'taken care of.
'If they knock me off, I can knock them off,' he said. 'The whole idea is to have fun.'
Woods said fellow golf pros would not be surprised by his auto racing debut.
'A few guys out there on tour do race quite a bit,' he said, citing as one example drag-racing compatriot Kenny Perry.
Williams said he had tried for some time to get Woods behind the wheel.
'He said that looks like a lot of fun and I said, `Don't worry, one day I'll get you in one of those things,'' Williams said.
Woods is making his second visit to New Zealand. He also visited the country in 2002 to play in the New Zealand Open.
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