This Paper describes a new hybrid algorithm for multi-body Dynamics in vehicle system dynamics which exploits the advantages of both embedding technique algorithm and augmented formulation algorithm. A vehicle dynamic modeling based on the hybrid algorithm is presented. Embedding technique has a relatively small number of equations of motion. Using embedding technique an enhanced parametric vehicle dynamics model can be built, in which the kinematic and compliance characteristics of suspension are represented by characteristic curves. Because of small number of equations the vehicle dynamics model can be simulated very efficiently. Compare to embedding technique a main benefit of augmented formulation is relatively simple for computer programming. With the help of the augmented formulation the structure of the vehicle dynamic model can easily be extended. Advantages of both embedding technique and augmented formulation can be utilized by hybridizing them. Compute Software such as IPG. CarMaker uses a relatively simple model, in which the suspension can be defined using characteristic curves. IPG.CarMaker is not a problem for real-time simulate, but it is difficult to extend the model for some applications. For instance the model can’t be coupled with virtual road simulator. The vehicle dynamic model presented in this paper includes the potential for real-time simulation and is also able to be extended for some applications such as simulation with virtual test rigs.