A transponder is a electronic chip that is embedded into the plastic head of the key which contains a electronic code which adds up to billions and trillions of electronic code series which of course adds another security feature to present day automobiles and trucks.

The operation of a transponder key is that when its inserted into the ignition cylinder a radio frequency signal is emitting and the transponder chip in the key is energized allowing the chip to transmit a electronic code back to antenna which is placed into the ignition cylinder or instrument cluster. Then the electronic code is check by the automotive electronic logic system for a valid code. In simple talk if the electronic and mechanical code configurations are correct the vehicle will start if the codes are wrong the ignition system does shut down for a period of time depending on the automotive manufacturer.

The upside to the transponder system is that automotive thefts have decreased. The downside is that the keys are more costly then a standard key to duplicate. The general cost of a duplication of a transponder key is very expensive. Where the real cost comes into play is when a vehicle does not have a key then the origination process can cost a few hundred of dollars to thousand of dollars depending on the automotive manufacturer.