The official iPhone Bluetooth range is 800 feet (which means if you or anyone with an iPhone passes within 800 feet of an AirTag, you can track it).
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However, there are a few exceptions carved out in the law. Unless there is a domestic violence protective order or other restraining order in place, hiding an AirTag in your car may be legal, so long as the car is titled or leased in your name or jointly with your spouse.