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How to Use Automotive Keys Properly There are a variety of styles of automotive keys. Some of them have transponder chips on their heads, and others are flat and function mechanically through grooves on the tops and bottoms. Car keys of the past were easy to copy, but manufacturers later added a chip that stored a unique"password" for your car. This adds an extra layer of security against theft. Transponder key A transponder key, or chip key, is a specific car key that is equipped with an electronic microchip inside the head of the key. This