In the mid-90s, auto manufacturers began to use new technology in car keys to help make vehicles more secure and prevent car theft. This technology, which relies on a tiny computer chip embedded within a car key, can now be found in more than 95 million vehicles and is very common in new cars. These high-security keys are commonly known as transponder keys -- a combination of transmit and respond -- and are also referred to as chip or security keys.
What a Transponder Key Is -- And Isn't
From the humble metal key of the past, the car key has evolved significantly over the years, but it's important to understand that not every advanced or electronic car key is a chip or transponder. Key fobs, smart keys, auto start devices and keyless entry systems are separate entities than chip keys. A chip or transponder key is strictly a key that contains a microchip. Sure, your car key, fob or remote may also do other things, and many chip keys also contain auto-start buttons and other features, but the term transponder strictly refers to a key equipped with a chip.
This chip key is more than just a way to open the car door and start the vehicle; it's actually a part of the car's security system and is tied into the car's computer.
How Transponders Work
Transponders contain no batteries. Instead, when you insert the key into the ignition, an antenna coil built into the dashboard will generate a magnetic field, which provides power for the chip in the key. This powered-up chip sends a signal to the car's computer system. If the code programmed into the chip matches the one in the car's computer system, the car will start. If it doesn't match, the car either won't start at all or will start up before quickly shutting down. The odds of any given chip key randomly matching the code in a given car are in the millions, making this a highly secure technology.
Chip keys can be a double-edged sword when it comes to replacing lost keys. While transponder keys make your vehicle more secure, they can also make it tougher to get a new key. To ensure that the code on the chip matches the code in the car, you must get duplicate or replacement keys from the dealer or from a skilled locksmith equipped with proper diagnostic equipment. These experts can also change the code in your vehicle if you lost your keys, so that no one can use your old, missing keys to steal your vehicle. They will then generate a new code for the car, as well as a new chip key to match the new code.