Sensor-based driver assistance systems often have a safety-related role in modern automotive designs. In this paper we argue that the current generation of "Hardware in the Loop" (HIL) simulators have limitations which restrict the extent to which testing of such systems can be carried out, with the consequence that it is more difficult to make informed decisions regarding the impact of new technologies and control methods on vehicle safety and performance prior to system deployment. In order to begin to address this problem, this paper presents a novel, low-cost and flexible HIL simulator. An overview of the simulator is provided, followed by detailed descriptions of the models that are employed. The effectiveness of the simulator is then illustrated using a case study, in which we examine the performance and safety integrity of eight different designs of a representative distributed embedded control system (a throttle-and brake-by-wire system with adaptive cruise control capability). It is concluded that the proposed HIL simulator provides a highly effective and low-cost test environment for assessing and comparing new automotive control system implementations.