Hardware-in-the-loop simulation may become a standard tool for the development of electronic or mechanical automotive components. A single component or even a whole vehicle can be replaced by mathematical models simulated in real time on small and cost-effective hardware systems, while other components which need testing or are just part of the test setup, are connected to the simulation in a closed-loop configuration. Increased experience and advances in software and hardware make this technology very attractive. Typical examples demonstrate how it can not only reduce field tests, but also make formerly unfeasible experiments practical. Some of the software and hardware issues are also discussed.