A simplified explanation of a transponder key system is as follows: located around the mechanical key hole of your ignition is an antenna coil. When the key is turned on, the coil becomes energized and creates a small magnetic field. This magnetic field in turn energizes a small transponder chip imbedded in the plastic head of your key. The chip then emits an alpha numeric code signal to the antenna ring which the carries the information to the cars computer. If the signal contains the proper coding, the computer allows the car to start.
