Well i have a solution thats not expensive, so if it goes wrong no big deal. ecklers corvette parts sell a product for 25.99 that will override the security system. its for 1986-1996 corvettes. hope it works.
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This is a very common problem on GM vehicles. The security system is known to fail. Basically when you insert your key, the system checks for certain OHMS resistance. If the system cannot get the correct signal from the key, it assumes the key is incorrect and goes into SECURITY lockout mode. (prevents hotwiring) This has been happening with GM;s for a very long time. There are ways to bypass this now. Read through this page for info, solutions as well.
The security, antitheft or lock picture/icon is a visual indication that something in the car's antitheft system is failing. In most GM cars and trucks there is a hidden system that most people are unaware even exists. From the moment you put your key in the ignition, there begins a constant line of communication between your key's security chip or transponder, to the ignition's lock cylinder, and then to the car's TDM (Theft Deterrent Module). These 3 parts are in CONSTANT communication. If the key is in the ignition, then these parts are sending signals to each other. The security light illuminates when that signal gets broken, even just for a second. When the signal breaks, the car misinterprets this as an attempt at theft and goes into antitheft mode. The car thinks its being stolen or hotwired because it is not getting that signal from YOUR specific key. This is why the security light turns on and shuts down your vehicle. This link explains it pretty well. Side note: the only reset procedure for VATS is the ten minute reset. It is on this link as well. There is nothing else for VATS. No training or relearn process. It's really not that smart. It either works, or it's broken.
These cars have an antitheft system called VAT. The key have 15 different values. This means fifteen different resistant values. For those who still have your keys use an ohm meter and take a reading on that little black thing on the key near the finger grip; write that value down. Then match that value to the correct key numer 1-15; get that key and have it cut; it should work. Also the wires can go bad in the ignition lock and the system won't read the key and will cutout the starter and fuel pump for around 10-15 minutes then reset. To fix this is to either replace the lock and the two wires that go with it. You can bypass the vats using the correct value resister and finding the two small wires under the dash coming from the steering column unplug it and stick each end of the resistor in the female side of the plug going into the dash area. For those who have lost their keys you will need allot of patance and get all fifteen value keys in resistors; try them one at a time until you get the right one. The wrong one will trigger the security system and you will have to wait 10-15 minutes for each reset before trying again. Then get a new ignition lock and same key number 1-15 according to the resistor value; cut it for the new lock and install. The only other way is to buy a new vats module they program one time only and tear the dash out of the car to get to it.
There are 2 factory alarms on your car...VATS is the one with the resistor pellet in the key. 1) make sure the key you are using is clean at the pellet, any dirt will incease the resistor value. 2) if you have an after market alarm, make sure its door lock output is the same as the vettes (+ ground, - ground, or relay) 3) if your cars is all factory stuff, your VATS module may be bad [the least likely). Suggest a bypass kit...search 'VATS values' and match the resistance with the value of your key 1-15. If your key has a super warn pellet, you can match the resistance value on your key to a guy on ebay 1-15, buy the key on ebay for $15 and have anyone cut it..or go to a dealer and drop $50. BTW --your starter kill delay should only be 5-8 minutes.