A transponder key or ‘chip key’ is an automotive key designed to prevent vehicle theft. When the ignition is switched on the on-board computer or ECM (electronic control module) transmits a radio frequency which is received by the transponder chip. The transponder chip in return then sends out a coded signal which is read by the on-board computer of the vehicle. If the coded signal is correct the vehicle will then start.
Many people who have transponder keys are unaware because the chip is inside the plastic head of the key