A transponder key is a type of car key that contains a small electronic chip. This chip communicates with the vehicle's ignition system to ensure that only the correct key can start the engine. When the key is inserted into the ignition, the chip sends a unique code to the car, allowing it to start if the code matches. Transponder keys enhance vehicle security by preventing unauthorized access. If someone tries to use a regular key or a duplicate without the correct code, the car will not start. This technology is commonly found in modern vehicles, making it more difficult for thieves to steal cars.