Compete with restriction lifted in leading vehicle (4,3)
I believe the answer is:
pace car
'leading vehicle' is the definition.
(I've seen this before)
'compete with restriction lifted' is the wordplay.
'compete' becomes 'race' (racing is a kind of competing).
'with' is a charade indicator (letters next to each other).
'restriction' becomes 'cap'.
'lifted' is a reversal indicator (going up in down clue).
'race'+'cap'='racecap'
'racecap' written backwards gives 'PACE CAR'.
'in' acts as a link.
(Another definition for pace car that I've seen is " Leading vehicle".)