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The red light doesn't just indicate that there isn't a key in the ignition. It indicates that the car cannot sense a valid security chip near the ignition (it's embedded in the key) and that if you try to start the car without one, the engine will be disabled.
If you attempt to start the car without a valid chip, or try to 'hotwire' the car, a dealer will have to reset the engine computer before the car will run again.
Most all insurance companies give a pretty good discount for this. Make sure you're getting it.
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Toyotas in the family/next of kin:
1982 Corolla Wagon, 1989 Corolla DX, 1991 Previa LE, 1993 Previa LE,
1993 Pickup, 1994 Corolla DX, 1995 Avalon XL, 1996 Camry XLE, 1998 Avalon XL,
1998 Sienna CE, 1999 Camry XL, 2000 Camry XLE, 2002 Tundra, 2003 Tundra,
2003 ES 300, 2004 Camry XLE, 2005 Tacoma
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Actually, I think it's suppose to make this car look like it has an alarm. But, it doesn't. If you were a car thief you would have known this... 
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