I have a credit score of 511 and am looking to purchase a car for 11,000. I have a cosigner with excellent credit. What are the chances of me getting a loan in Colorado? Should I be looking at Credit Unions?

My husband and I signed a $20,000 loan on a truck. The payments were behind and the car was in a wreck. The truck was repossessed and the loan company says we still owe $8000. The loan company offered a settlement of $2800 if we pay by the end of the month. Does this sound right to anyone?
How would it really affect my credit if I pay off the loan now?