I would think the time to negotiate is after it leaves the factory. The $500 is fully refundable and the dealer has a car coming that they need to sell.
A lot of the discounts that are now appearing at dealers are probably cars that the original buyer canceled and the dealer now needs to sell.
Don't forget, the $7500 tax credit can only be used on new cars. As soon as the car is driven off the lot, the resale value is at least $7500 less than the sale price.