With the benefits of Internet of Vehicles (IoV) paradigm, come along unprecedented security challenges. Among many applications of inter-connected systems, vehicular networks and smart cars are examples that are already rolled out. Smart vehicles not only have networks connecting their internal components e.g. via Controller Area Network (CAN) bus, but also are connected to the outside world through road side units and other vehicles. In some cases, the internal and external network packets pass through the same hardware and are merely isolated by software defined rules. Any misconfiguration opens a window for the hackers to intrude into vehicles' internal components e.g. central lock system, Engine Control Unit (ECU), Anti-lock Braking System (ABS) or Adaptive Cruise Control (ACC) system. Compromise of any of these can lead to disastrous outcomes. In this paper, we study the security of smart vehicles' adaptive cruise control systems in the presence of covert attacks. We define two covert/stealth attacks in the context of cruise control and propose a novel intrusion detection and compensation method to disclose and respond to such attacks. More precisely, we focus on the covert cyber attacks that compromise the integrity of cruise controller and employ a neural network identifier in the IDS engine to estimate the system output dynamically and compare it against the ACC output. If any anomaly is detected, an embedded substitute controller kicks in and takes over the control. We conducted extensive experiments in MATLAB to evaluate the effectiveness of the proposed scheme in a simulated environment.