Pete and his partner, Davy Johns, arrive in Puerto Vallarta, Mexico to pick up Herbie for the Grand Primeo of Brazil. At first he shows less confidence in the little car but reluctantly takes possession and becomes his new owner. His opinion soon changes when Herbie shows off his incredible speed while trying to help Paco escape from three men who are after him.
Boarding a cruise ship he meets a young woman named Melissa and they fall for one another. After losing Herbie, he and Davy find a job in Panama but soon go after Paco again when he steals his wallet. With Melissa's help they commandeer a rundown bus and go after Herbie and Paco, they pick up Aunt Louise Trends and Captain Blythe along the way. At the end he gets Herbie back and starts a relationship with Melissa.