Transponder Keys: Why Are They Expensive?

by | Jul 22, 2020 | Automotive Programming

Transponder keys (Aka “Chip keys”) have a large price tag, especially compared to normal metal key blanks. But why is there such a cost difference?


key programming houston

Pop culture loves the ‘90s. JNCO jeans, VHS Tapes, and AOL are remembered sometimes fondly and sometimes painfully with a little hindsight. Things were simpler then, including (for the most part) car keys. But simple doesn’t always equal better. Heading into the early ’90s, car theft was at an all-time high. Thieves had devised ways to get into a car and make off with it in a matter of minutes without a copy of the key. So, to combat this, auto manufacturers turned to technology developed during World War II: Radio transponder keys.

These “chip” keys are a bit more technical than a standard metal key blank. But many people ask “Why are transponder keys so expensive?”. After all, they work exactly the same as a standard metal key, right?

We’ve talked a little bit before about what a transponder key is, but not specifically on why they cost so much. That’s why today as a Houston locksmith and local automotive locksmith company, we’re going to step back and examine what causes the price difference in keys today from before the advent of the transponder key.

The First Car Keys

Believe it or not, some of the first cars didn’t have locks at all! In fact, until 1910 there was no ignition lock on a vehicle, and they were commonly started by manually cranking the ignition, or with a press of a button for advanced models. Even then, these locks were cylinder locks and a lot closer to a lock on a home door today than what you see in vehicles.

It wasn’t until the ‘40s that Chrysler sold a key that used an ignition tumbler to actually start a vehicle. At this point, and for some decades after, most cars had multiple keys to work individual locks instead of one key that could work everything.

Through the ‘80s, lock and key tech on vehicles didn’t change much, besides the rigging of locks using a wafer-system so that one key could work for the entire vehicle. These cylinder style locks were easy to make keys for but also easy to pick for thieves attempting to break into a vehicle. It was a problem that compounded over time as information became easier to get with the rise of technology. Theft rates continued to rise with no end in sight, but what options were there to deter them?

decipher door lockA New Kind Of Car Key

Enter the transponder key and immobilizer system. These systems had been invented and patented before World War II but weren’t picked up as an option until the problem of car theft (especially in the ‘80s) had risen until the need to adopt these systems was apparent.

The system essentially works like this: Inside of a vehicle’s steering column is a component that diverts power from the ignition system if a key doesn’t receive and echo a radio signal sent by the car’s computer. To break this down even more, when a key is placed into an ignition, the ignition system produces a radio frequency that functions as a code to the “chip” in a transponder key. If the transponder key is programmed to recognize this signal, it broadcasts a response to the ignition system and allows the vehicle to start.

With a single innovation, the overall theft rate of cars between 1995 and 2008 dropped like a stone by over 40% and has fallen even more as these systems become more widespread and older vehicles leave the market.

The Reasons Transponder Keys Are So Expensive

“Well this is interesting and all, but what makes transponder keys cost so much?”

We’re glad you asked. The answers are actually pretty simple. With the old-style metal keys before, you simply cut them like a house key and were done. If there was an error or mistake, you toss that miscut blank and lose maybe a few cents in cost as a locksmith.

With transponder keys, the game is entirely different.

First, these keys are designed with electrical components such as circuitry and a battery, which inherently makes them cost more for a locksmith to keep as stock. Each mistake can cost several to dozens of times more than on a standard metal blank. 

On top of that, the car’s computer also needs to be programmed to recognize the new key as a valid chip. The programmers and key cutting machines locksmiths need to buy and maintain for this process are very expensive. Usually totaling several hundred dollars per unit, as well as either monthly or per-use charges per vehicle. If these programmers break, or if a particular shop needs to keep multiple in stock for different types of vehicles, the price really adds up.

The labor is also a factor as programming a car key can take anywhere from 10 minutes for an easier system to over an hour if all the keys are lost. It can also take longer if the particular make, model, and manufacture year combination has significantly higher security measures to work through. This is compared to, again, a standard metal key blank taking only a few seconds to minutes to cut correctly.

Speaking on this last point, many European models in particular like BMW, Audi, and Mercedes have specific systems designed only to work with that one vehicle model. Just like the cost of the imported cars themselves, this software is several times more expensive than standard makes like Ford, Chrysler, or Toyota and is another cost locksmiths need to consider.

Most auto locksmiths don’t even service these types of vehicles due to liability issues should anything go wrong.

Where To Get Transponder Keys In Houston, Texasmake transponder key houston

Guardian Safe & Lock offers many services as security professionals. We provide Houston security camera installation and install access control systems Houston can depend on. We go on both residential locksmith and commercial locksmith jobs. We sell safes Houston can keep for a lifetime. But we’re also your local car locksmith.

When you need a chip or transponder key like we’ve discussed today; call on us. We’re locally owned and operated, servicing all of the greater Houston area. 

Regardless of if you’ve lost every key and need an emergency locksmith to come to you, or if you simply need a metal blank for an old truck, we are here to help!

Give us a call today at 832-534-8687 and see how much we can take off of your dealer’s price for key duplication or replacement. We usually can save you 60% of their cost or more!

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