How do transponder keys work?

When an ignition is turned on with a transponder key, the vehicle sends a radio signal to the RFID chip in the key, from a transceiver coil (an antenna that sends and receives signals) located around the ignition lock. The radio signal contains information which commands the RFID chip (located in the head of the key) to return a signal which contains the unique digital identity for that RFID chip. When the RFID chip returns a radio signal containing its own unique digital signature, the vehicle's security system evaluates it. If the vehicle's security system recognizes this as a valid digital signature of a registered key, it allows the vehicle's engine to operate, otherwise it does not. Passive RFID chips do not require batteries because the radio signal sent out by the vehicles transceiver from close range induces enough current in the RFID chip to power the chip's circuitry and return a weak radio signal which the vehicle's transceiver can pick up at close range.

Why do cars have transponder keys?

Transponder keys dramatically reduce vehicle theft. Most automobiles are now transponder equipped which means that keys used to start the vehicle must have transponder (RFID) chips programmed to that vehicle in order for the vehicle to be driven. If the ignition is "hot-wired", broken, or forced into the "on" position, as many car thieves will do, the vehicle will not operate without the presence of a registered transponder key. By having a vehicle that is less likely to be stolen, you also benefit from lower insurance rates (if your auto insurance includes theft coverage).

What do the RFID transponder chips look like?

Because the RFID chips in transponder keys are inside of the keys, a key would have to be cut open to see the transponder chip. The RFID circuitry in keys most often comes packaged either in a glass ampule or a plastic "wedge" like the ones shown below. They are sometimes referred to as transponder pellets. The copper colored areas are actually very fine windings of copper wire which make up the transceivers contained within the units.

(2) glass pellets shown to left and (3) "wedge" style pellets to right