FREQUENTLY ASKED QUESTIONS:

AUTOMOTIVE > Transponder Keys

What’s a “transponder key”, and why does it cost more than a regular key?

A “transponder” is a small RF (radio frequency) device that transmits an electronic signal when “asked” by another RF device. In the automotive industry, transponders are used as anti-theft devices incorporated into the head of a key which transmit a coded signal to the car’s ECU (engine control unit---the computer responsible for making your engine start and run). The ECU looks for this coded message at startup, and disables the engine temporarily if the signal is not transmitted.

Transponders enhance your vehicle’s security in two ways: First, they help prevent theft by making it much more difficult to start your car’s engine by unauthorized means (breaking the ignition lock out or “hotwiring” it, as two examples). No chip, no start. Simple as that. Since virtually all modern automobiles require a purpose-built computer to run, hotwiring is no longer a practical or viable method of stealing cars (contrary to what Hollywood would have us believe). Unless you’re willing to rig up a carburetor and points ignition (or are a computer whiz intimately familiar with automotive engine management systems---in which case, call us, we’ve got a job for you), you’re not going to find an easy way to bypass transponder anti-theft systems, by force or otherwise.

Second, they limit the possibility that another key (not associated with your car) can accidentally or intentionally be used to start your car. Each key has, for all intents and purposes, a unique electronic signature. In most cases, the number of unique keys can number in the billions, trillions, or more. The likelihood of two keys having the same electronic signature is astronomically slim, however, the mechanical cuts on the key are limited by the much smaller pool of available combinations. Ford, for example, has less than 2,000 different key combinations used since 1996 in the majority of their vehicle lines. So, without transponder keys, the odds that someone else’s Ford, Lincoln, or Mercury key would start your 2003 Taurus are 1 in 1706. It is possible to expand the number of mechanical combinations of keys, but it generally adds complexity to the lock, and tends to increase the possibility of lock failure, or makes the key difficult to copy or easily damaged, or makes it too large to carry comfortably in your pocket.

Now, this doesn’t mean a vehicle with a transponder system is impossible to steal---no lock in the world is impenetrable---what it does mean is that a vehicle with a transponder system is significantly harder to steal than one without. Insurance companies acknowledge this and generally discount comprehensive insurance for vehicles with factory-installed anti-theft measures such as this. In many cases, the savings gleaned from these discounts easily offset the cost of a few spare keys.

How effective are transponders at preventing auto theft? According to NICB (National Insurance Crime Bureau), of the top 10 most stolen cars in the US as of 2005, only one model (2004 Dodge Ram) has an optional transponder system. Most Ram pickups in that year did not have a transponder system, but it was an option.

http://www.statefarm.com/learning/be_safe/road/learning_besafe_onroad_cartheft1.asp

Additionally, the vehicle listed with the highest theft rate---the 2003-05 Cadillac Escalade---has a theft claim rates seven to eight times the average for all cars. The Escalade, arguably the crown jewel of GM’s SUV line, did not include a transponder anti-theft system---even as optional equipment---until 2007. To illustrate an insurance discount, a quote for comprehensive insurance for a 2005 Lincoln Navigator, a close equivalent to the Escalade, yielded a premium of $281 semi-annually. The same policy for a 2005 Escalade yields a premium of $324, a difference of $86 annually.

(Vehicles listed as garaged in zip 37771, average use, 12,000 miles driven annually).

Both vehicles are advertised as incorporating anti-theft systems, but only the Navigator utilizes a transponder key, which must be programmed into the ECU in order to drive the vehicle. The Escalade uses a plain metal key, which can be furnished cut to your VIN number at the parts counter of virtually any GM dealer in the country. This plain metal key is all that’s required to not only disarm the Escalade’s alarm, but start and drive off into the sunset.

Why do they cost more than regular keys?

For starters, the blanks themselves are more expensive than regular mechanical blanks: Our inventory of transponder keys ranges from $25 to nearly $300. In virtually every case, our price is equal to or less than what you would pay for the same key at the dealer. If we can’t sell you a key at a competitive price, we’ll tell you prices we’ve found when shopping for them and let you decide where to buy*.

In addition to the key, specialized and expensive equipment is required to “teach” the key to your car. As with any business, the cost of this equipment has to be factored in to each sale we make in order to make it worthwhile to be in business. As such, each key that we sell that requires programming via this type of equipment carries a programming fee, typically $30-40 per session. Again, in most cases, this fee is less than or equal to what you’d pay at the dealer for the same service. If we know we can’t program your key for less than the dealer, we’ll tell you as much*.

*of course, if your brother-in-law owns the dealership and is giving you the key or programming, it’s pretty hard for us to compete. We’re talking average-joe-off-the-street prices here.

Think our prices are fair? Tell your friends. Think they’re out-of-line? Tell us. First and foremost, we want to offer you the best parts and service at a price that’s reasonable.

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December 8, 2008 @ 8:37 pm | by B.T.