1. **State the problem:** We need to find the percentage reduction when the price of a car decreases from 12500 to 11625. 2. **Formula for percentage change:** $$\text{Percentage change} = \frac{\text{Original price} - \text{New price}}{\text{Original price}} \times 100$$ 3. **Calculate the difference:** $$12500 - 11625 = 875$$ 4. **Substitute values into the formula:** $$\text{Percentage reduction} = \frac{875}{12500} \times 100$$ 5. **Simplify the fraction:** $$\frac{875}{12500} = \frac{\cancel{875}}{\cancel{12500}} = \frac{7}{100}$$ 6. **Calculate the percentage:** $$\frac{7}{100} \times 100 = 7\%$$ 7. **Final answer:** The percentage reduction is **7%**.