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Alonzo Hawk is a mean-spirited property developer who has bought several blocks of land in the downtown district in order to build a gigantic shopping mall. There is one problem however; an elderly widow named Steinmetz won’t sell the one remaining lot that Hawk needs to proceed with his scheme. So he resorts to all manner of chicanery, legal or otherwise, to get it. Fortunately, the widow Steinmetz has an ace up her sleeve in the form of Herbie, the miraculous Volkswagen.

Arnie Cunningham is a typical high school nerd who is picked on, overruled by his parents, and has very few friends. Until he meets Christine, a run-down 1958 Plymouth Fury and buys her. Arnie learns that Christine has a thing for him and devotes his time to restoring her to Mint Condition. But overtime, Arnie begins to change and becomes disconnected with reality and his friends. Arnie’s girlfriend Leigh and best friend Dennis find out that Christine’s previous owner cared about nothing else when he bought her and find out that Arnie is becoming just like him. The only way they can bring Arnie back to reality is to destroy Christine, But Arnie and Christine are ready to destroy them first and any one else who gets in their way.

Maggie Peyton (Lindsay Lohan), the first Peyton to graduate from college receives a graduation present from her dad (Michael Keaton) and as she’s about to get a 250Z, she instead receives a Volkswagon Bug (Herbie) and Herbie takes her for a ride. Herbie takes her to “Kevins Custom Car Shop” run by her best friend Kevin (Justin Long) where they take Herbie for a test drive and end up at a car show where Herbie beats all-time racer Trip Murphy (Matt Dillon)in an impromptu street race. Trip demands a rematch and attempts to discover the secret behind Herbie. But Magwheels’s biggest challenge isn’t the up and coming Daytona 500, It’s proving to her dad that she’s good enough to be the next great Peyton.