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How to Use Automotive Keys Properly There are many different types of automotive keys. Some have transponder chips inside their heads, and others are flat and operate mechanically through grooves on the tops and bottoms. Early car keys were easy to copy, but manufacturers later introduced a chip that stored a unique"password" for your vehicle. This is an additional layer of security against theft. Transponder key A transponder, also known as a chip key, is a unique key for cars with an embedded microchip in its