Jimpy and the Damson Street Gang are warned by a local policeman to keep their soapbox kart off the streets; he suggests they visit the local go kart race meeting. The Gang enjoy watching the motorised kart races until they see Harry Haggerty, leader of the rival Craven Gang, taking to the track in a gleaming kart paid for by his garage-owning father. Haggerty wins the junior race by forcing rivals off the circuit.

The Damson Gang ask their parents for their own kart but, although Jimpy and Square Head's fathers are keen, their mothers put their feet down. They build their own kart instead, using parts from Fred's scrapyard. Jimpy's test drive looks promising until the handlebars come off and he nearly ends up in the canal. The all-important motor is damaged, so it's back to the drawing board for Ecurie Damson.

Square Head 'borrows' a lawnmower engine from his gardener dad and, after a successful test run, Haggerty challenges Jimpy to race him this Saturday's. Square Head's dad takes the mower motor back, but the souped-up engine sends it shooting out of control, causing havoc. Dad suggests that with an engine like that the gang should do well.

The Damson parents cheer on Jimpy, who drives well until Haggerty forces him off the track. Cursing Jimpy's bad luck, the parents club together to buy a Superkart kit. The Craven Gang attempt to dump the kit in the canal but, fooled by Square Head, steal a decoy box filled with Fred's scrap instead. Later, however, the Cravens sneak into Square Head's garage and sabotage the kart by sawing halfway through the front axle.

Next day, the karts take part in a three-race tournament for a challenge cup. Jimpy wins the first race, but afterwards the sabotaged front wheel comes off. Jimpy has to sit out the second race - which Haggerty wins - while the rest of the gang search Fred's yard for a new axle. Square Head delivers one as the third race is about to start - with little time to prepare, Jimpy is forced to drive with a split pin missing from the wheel assembly. Jimpy drives brilliantly, and when Haggerty tries to barge him off the track, Haggerty is thrown off and crashes into a pond. Jimpy's wheel comes off just short of the finish, but he still takes the kart across the line to win the trophy.