The narrator,, unfolds the story of Herbie the Volkswagen Beetle. Herbie was owned by an egotistic racing driver and car dealer named Simon Moore III. Due to his arrogance, he did not treat Herbie very well. During a race, Simon Moore III called Herbie junk, which caused Herbie to rebel against his owner. They ended up in last place for the race. Simon was not pleased and he threw out Herbie in a junkyard. Hank Cooper, a small-town mechanic who works in a local garage, enters a junk-car race where drivers select a jalopy and attempt to start and race it. Hank ends up getting "last choice" and is forced to choose the only car left, a broken-down Herbie. Assisted by his "spiritually enlightened" but goofy friend Roddy, Hank manages to get Herbie started just before he is towed off the track. In appreciation for his kindness to the little VW, Herbie manages to win the race, trouncing such junkers as a Cadillac limousine and an early-model Corvair Monza convertible. The judges of the race, Donny Shotz, Alex, whom Hank used to date; and Simon, find it hard to believe that such a tiny car could run so fast, and Alex challenges Hank to prove that he didn't try any tricks during the race in order to win. Hank takes Alex for a ride, showing Herbie's speed, and their relationship is re-kindled. Meanwhile, Roddy tells Hank that Herbie is special, and takes him to an automotive art show. At the show, Simon sees Herbie and attempts to discover why his car, which failed him, took Hank to victory. He discovers that Herbie was built by Dr. Gustav Stumpfel shortly after World War II. He asked Dr. Gustav to create another car, but he wants the car to be pure evil and black. He ends up naming the second car "Horace the Hate Bug," using the "magical ingredients" of a picture of Simon, along with Herbie's key. Simon orders Horace to find Herbie and destroy him, which Horace does, leaving Herbie a heap of crushed metal. Hank catches up with Herbie, but finds it's too late to save him, and Hank, Roddy, and Alex give Herbie a funeral. At the funeral, Herbie's former owner Jim Douglas arrives, with Dr. Stumpfel, and after examining Herbie's remains, informs them that he can be rebuilt, provided they use all of Herbie's original sheet metal. Hank gets Donny Shotz, an auto customizer, to re-shape and paint Herbie's sheet metal. Hank, Roddy, Alex, and Jim work to rebuild Herbie, and when finished, Hank gives Jim the honor of trying to start him. Herbie starts on the first try, and sounds his horn, letting them know that he's the same car that they have come to know and love. Meanwhile, Simon challenges Hank to a race between Horace and Herbie. Although Simon makes every attempt to sabotage the race, Herbie manages to win. Furious, Horace tries to destroy Herbie again by ramming him off a cliff, but ends up falling into the ravine himself. Simon and his partner Rupert are then arrested for illegally detonating explosives, driving an unregistered "devil car," and illegally dumping said car. The film ends with Hank and Alex, in love again, driving off in Herbie after finishing up on a magazine article about Herbie.
