The blast set ablaze over 30 cars and damaged dozens of others, along with destroying the checkpoint buildings, the source said.
"Some of the bodies were badly charred because many of the victims could not get out of their cars as their doors were shut by the pressure of the explosion," the source added.
No group has immediately claimed responsibility for the deadly attack.
In a separate incident, gunmen opened fire at a minibus carrying employees of the government-owned North Oil Company near the city of Tuz-Khurmato, some 200 km from Baghdad, killing three and wounding six.
The assault occurred in early hours of the day when the employees left their homes for work.
In Iraq's Nineveh province, gunmen shot dead Brigadier General Salim Hassan, an officer in the provincial intelligence service, near his house in eastern the provincial capital city of Mosul, some 400 km from Baghdad, a provincial police source said.
A soldier was killed and three wounded when a roadside bomb went off near an army patrol in Abu Ghraib area, some 25 km from Baghdad, a local police source said.
In Anbar province, two people were killed in mortar and artillery shelling on Nu'imiyah area, in the southern part of the militant-seized city of Fallujah, a provincial police source said.
According to the UN Assistance Mission for Iraq, a total of 8,868 Iraqis, including 7,818 civilians and civilian police personnel, were killed in 2013, the highest annual death toll in years.