By accident, the content of a computer encyclopedia is transferred into the brain of Dexter Riley, a less than average college boy. Because of his newly acquired knowledge he competes in a quiz show between various universities, where he sweeps all the points. A wiz kid from another university finds out about his cheated wisdom and does everything to discredit Dexter.

The inimitable VW Beetle is losing all his races and destined for the scrap heap until mechanic Hank takes him over and gives him a new lease of life. Soon, Herbie is winning again, to the fury of his previous owner, who builds a menacing black bug to challenge Herbie to the ultimate race.