(NewsNation) — Prices for used electric vehicles have plummeted following price cuts on new EVs led by Tesla.

Tesla, along with other EV manufacturers, cut prices on new models to help boost sales as interest in EVs dropped. That has led to a surplus of unsold used EVs, a reversal of a previous trend where used EV prices had risen to a similar level as new EVs due to supply chain issues.

In September, the average price for a three-year-old EV came in around $28,400, a 25% drop from early 2023, according to Edmunds. That’s also a bigger drop than other used car prices, which have remained relatively stable.

Another factor depressing value comes from Hertz’s decision to dump a large portion of its Tesla fleet, adding more inventory to the used market.

A surge in leasing has also made a difference, with more EV owners choosing to lease newer models rather than buy them outright. Combined with falling prices and some dealers applying tax credits to purchases to entice buyers, a new EV can be comparable in monthly payments to a used one.

That leasing trend could mean used prices continue to be depressed, as those leased cars will then enter the used car market once the lease term ends.

While the dip may be good news for buyers, especially those on a budget, it’s less welcoming for sellers and dealers. The Wall Street Journal reports many EV owners are now faced with cars that sell for less than they owe on their loans, leaving them underwater.