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To thoroughly test and validate algorithms and systems of autonomous vehicles, a large number of vehicles, many tests and a multitude of datasets are needed. This way of developing and testing is difficult, expensive and sometimes even dangerous. To combine the benefits of real world testing with the scalability and lower cost of simulation based testing, we present a novel methodology for a real-time hybrid simulator that is capable of handling real and simulated vehicles simultaneously with full interaction, in real time. We validated our methodology by assessing its overall performance and real-time capabilities using an F1/10 scale vehicle. The results effectively show the viability of this approach for validation of autonomous vehicles in a cost-efficient and safe manner. [ABSTRACT FROM AUTHOR]