Outside of Goffs, California, in the Mojave Desert, a policeman pulls over a 1964 Chevrolet Malibu driven by Dr. J. Frank Parnell (Fox Harris). The cop opens the trunk, sees a blinding flash of white light, and is instantly vaporized, leaving only his boots behind.
Otto Maddox (Emilio Estevez), a young punk rocker living in Los Angeles, is fired from his boring job as a supermarket stock clerk. His girlfriend leaves him for his best friend. Depressed and broke, Otto is wandering the streets when a man named Bud (Harry Dean Stanton) drives up and offers him $25 to drive a car out of the neighborhood.
Otto follows Bud in the car to the "Helping Hand Acceptance Corporation" (a small automobile repossession agency), where he learns that the car he drove was being repossessed. He refuses to join Bud as a repossession agent, or "repo man", and goes to his parents' house. He learns that his burned-out, pot-smoking, ex-hippie parents (Jonathan Hugger, Sharon Gregg) have donated the money they promised him for finishing school to a crooked televangelist. He decides to take the repo job.
Otto soon learns that, as Bud had told him, "the life of a repo man is always intense." He enjoys the fast living, drug use, car chases, hot-wiring cars, and good pay. His old life is boring by comparison.
After repossessing a flashy red Cadillac, Otto sees a girl named Leila (Olivia Barash) running down the street. He gives her a ride to her workplace, the United Fruitcake Outlet ("UFO"...), where they have sex in the backseat. On the way, Leila shows Otto pictures of aliens that she says are in the trunk of a Chevy Malibu. She claims that they are dead but still dangerous because of the radiation that they emit. Meanwhile, Helping Hand and its repo rivals are offered a $20,000 bounty notice for the Malibu. Most assume that the car is drug-related, because the bounty is so far above the actual worth of the car.
Parnell finally arrives in L.A., but he is unable to meet up with his waiting UFO compatriots because of a team of government agents led by a woman with a metal hand. When he pulls into a gas station, the Rodriguez brothers (competitors of Helping Hand) take the car. They stop for sodas because the car's trunk is so hot. While they are out of the car, a trio of Otto's punk friends, who are on a crime spree (what they call "doing crimes"), steal the Malibu.
After they visit a night club, Parnell appears and tricks the punks into opening the trunk, killing one of them and scaring the other two away, allowing him to take the car back. Later, he picks up Otto and drives aimlessly, talking about how a brilliant scientist friend gave himself a lobotomy to deal with his work, then reveals his friend drives a Chevy Malibu before collapsing and dying from radiation exposure. Otto takes the car back to Helping Hand and leaves it in the lot. The car is stolen from the lot, and a chase ensues with all the characters involved. By this time, the car is glowing bright green. Eventually, the car reappears at the Helping Hand lot with Bud behind the wheel, however he ends up being shot and leaves the car; the various groups trying to acquire the car soon show up - government agents, the UFO scientists, and even the televangelist Otto's parents gave his college funds to. However, anyone who now approaches it bursts into flames, even those in flame-retardant suits. Only Miller, an eccentric mechanic who works at Helping Hand, is able to approach and enter the car. He slides behind the wheel, apparently impervious to the radiation. He beckons Otto into the Malibu, and Otto accepts eagerly, dismissing Leila's confession of love (at which point she calls him a "shithead" and says "I'm glad I tortured you."). After he settles into the passenger seat, the Malibu lifts straight up into the air. The film closes with the car zooming through the air around downtown LA and then off into the stars.
Output: Who does otto take the car back to in the end?