He first appears on his Pontiac GTO and his crew to promote his new video game "Trip Murphy Undefeated" after making fun of Herbie, he challenges Trip in a street-race, which Herbie wins.
This delights Kevin, who tries to talk Maggie into racing again. However, Ray Sr., who has forbidden her from racing since she was hospitalized after a street racing accident years ago, is concerned. It also infuriates Murphy, who becomes obsessed with Herbie. Murphy organizes a local street-racing competition to lure Herbie back for a rematch, which Maggie and Kevin enter. Herbie easily defeats the other cars and qualifies for the final match with Murphy, but when Murphy talks Maggie into racing for pinks (where the winner takes possession of the opponent's car), Herbie becomes alarmed over Maggie's desire to win Murphy's stock car—incorrectly assuming that Maggie will have him scrapped if she wins the other car, and also unaware that Murphy only agreed to the match so that he could have Herbie scrapped if he got possession of him—and intentionally loses the race against Murphy's Corvette C6 Z06. Maggie is humiliated, Herbie is towed away, and Ray Sr. lectures Maggie for racing without his permission.
However, encouraged by her friend Charisma, Maggie decides to race professionally. She tries to buy Herbie back from Murphy, but Murphy has entered Herbie in a demolition derby. Desperate to save Herbie from destruction, Maggie goes to the derby, runs onto the field while the derby is in progress, pleads with Herbie to help her, and wins the derby.
Meanwhile, Team Peyton may have to forfeit an upcoming stock-car race due to financial troubles and two crashes by Ray Jr. Ray Sr. declines Maggie's offer to drive for the team, but Ray Jr. allows her to take his place and sends the Team Peyton crew to help her and Kevin prepare Herbie for the race. At the race track, Maggie and Herbie have a heart-to-heart conversation, and Murphy wishes Maggie luck but warns her that the race will be dangerous.
Herbie starts the race slowly, but he eventually catches up and begins passing the other cars before Maggie makes her first pit stop. While watching the race at home, Ray Sr. decides to watch the race in person. On the track again, Herbie is soon boxed in by some other cars, but Ray Sr. arrives at the track and encourages Maggie over the team radio, and Maggie escapes the trap by driving directly over Tony Stewart who was in front of her. This damages Herbie's oil system, so Maggie makes another pit stop and Kevin hurriedly extracts a replacement part from the yellow New Beetle, which Herbie has been eyeing amorously throughout the film, owned by Sally, one of Team Peyton's few remaining sponsors. The jerry-rigged oil system is fragile, and Murphy is intent on preventing Herbie from winning.
With Maggie, Herbie, and Ray Sr. now working together, Maggie and Herbie catch up to Murphy. Murphy tries to damage Herbie by pushing him into the track wall when Maggie tries to pass him, but he is caught off guard and crashes into the wall when she slams on the brakes during his next attempt. Herbie passes Murphy's car, now upside down on the track, by climbing onto the fence above the wall. After landing back on the track, Maggie and Herbie win the race. Maggie is congratulated by her father and brother, and Murphy is hospitalized as Maggie and Kevin kiss.