Jim Douglas (Dean Jones) is an unlucky race driver who is forced to buy a beat-up Volkswagen Beetle after a disagreement with car dealership owner Peter Thorndyke (David Tomlinson). The car’s strange, crazy behavior angers Jim but attracts the attention of his friend Tennessee (Buddy Hackett), who strikes up a friendship with the car and names it “Herbie."

Jim soon finds out that Herbie can help him win races, as well as the affection of Carole (Michele Lee), a sales assistant at Thorndyke’s dealership. Jim and Herbie face Thorndyke's wrath together, but their companionship is tested when complications arise and the dealership owner seeks to use Herbie to his own advantage.