The Mayor of Peterborough is to receive a new Jaguar XJ which will cost £534 per month.
The four-year lease taken out by Peterborough City Council will replace the current model of the same car which is in need of repairs.
The current mayor is Councillor John Peach.
The council is also in the process of consulting on plans to make £12 million of savings for its 2016/17 budget.
A council spokesman said: “The civic car was taken off the road earlier this year due to serious issues with its brakes. After 10 years of use, the mounting cost of repairs mean it is no longer sensible to keep it on the road.
“To keep it going for a further 12 months would cost more than £6,500 and future repairs, given the car’s age, are inevitable.
“Therefore a decision has been taken, in consultation with leaders from all political groups, to lease a newer version of the same car – a Jaguar XJ. The old car will be auctioned to support the costs of the lease.
“The mayor is the city’s First Citizen and the council’s civic protocol state that the car should be of British origin and in keeping with the status of the mayor’s role.
“The mayor attends hundreds of events and over the last three years the First Citizen has raised more than £100,000 for local charities.”
The decision to lease rather than purchase the car was taken because any repairs are included in the lease price. The monthly repayments are also said to be lower.
The mayor’s EG1 number plate will be transferred to the new car when in use.
The council claims the benefits of the new car include double the number of miles to the gallon compared to the previous model and much lower CO2 emissions.