Ghastly horse circling vehicle (7)
I believe the answer is:
macabre
'ghastly' is the definition.
(I know that ghastly can be written as macabre)
'horse circling vehicle' is the wordplay.
'horse' becomes 'mare' (mare is a kind of horse).
'circling' is an insertion indicator (circling can mean going around or containing).
'vehicle' becomes 'cab' (cab is a kind of vehicle).
'mare' going around 'cab' is 'MACABRE'.
(Other definitions for macabre that I've seen before include "'Grim, repellent (7)'" , "Morbidly repellent" , "Dark and disturbing" , "Ghastly, gruesome" , "Chilling" .)