Concise and effective test scripts are the key points for automation of embedded software testing. To attain the best software quality, competent test cases and test methodology are mandatory. There are many tools available in market for testing automotive diagnostic software. In this paper, we will explain an improved method for testing automotive diagnostic software using DSSH (Diagnostic Service Script Handler) script engine.Generating detailed test-specification, automated test script and elaborate final test reports are easy tasks in DSSH. Furthermore, DSSH verification results show that it has the capability to generate effective test scripts for automated diagnostic software testing. Apart from that, DSSH script engine realizes real-time timing constraints of automotive embedded diagnostic software. Generating more than 20,000 test cases and executing them are just few clicks away with this method!Different Diagnostic protocols like ISO14229 (UDS), KWP can be tested with DSSH. Current paper will showcase how DSSH is useful and suitable for automotive diagnostic software development and testing. Furthermore, in this paper we will discuss on how DSSH can reduce time and effort in Diagnostic software life cycle by improved price-performance ratio.