Vehicle sailor used to collect army medics (7)
I believe the answer is:
tramcar
'vehicle' is the definition.
(tramcar is a kind of vehicle)
'sailor used to collect army medics' is the wordplay.
'sailor' becomes 'tar' (slang term for a sailor).
'used to collect' is an insertion indicator (inserted letters are held or collected).
'army medics' becomes 'RAMC' (Royal Army Medical Corps).
'tar' going around 'ramc' is 'TRAMCAR'.
(Other definitions for tramcar that I've seen before include "Public street transport on rails" , "Passenger vehicle running on rails" , "Electrically driven public transport vehicle" , "Electric transport" , "Electrical vehicle" .)