This document summarizes a paper presented at the 7th Transport Research Arena conference in Vienna, Austria in April 2018. The paper discusses the increasing demand for testing rail vehicles due to new safety standards, and how the hardware-in-the-loop (HIL) method used in automotive and aerospace has potential but high costs that do not fit the railway industry model of smaller batches. Tritem Microsystems developed a Virtual-HIL system using their ELMo simulation engine to decrease costs and increase portability. The document provides details on classic HIL approaches, limitations for rail, and how Virtual-HIL addresses these issues.