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The use of a functional model in the development of vehicle ride and handling characteristics can provide significant information to the engineer to aid and shorten the development process. This approach forms part of the new vehicle development strategy currently being developed at Lotus Engineering. The paper presents a description of a functional model that has been developed and used in the evaluation of vehicle ride and handling characteristics. The basic construction of the model is described and output is validated against vehicle test data. A case study shows how the model can be used in conjunction with vehicle testing to identify particular vehicle performance characteristics and provide potential solutions. The functional model makes use of global vehicle characteristics such as compliance steer effects and bump steer characteristics, rather than modelling individual suspension components.