There are different schools of thought on this. When possible, I'd say pay off/down everything you can to clean up the credit profile. This will result in lower rates for the loan and save you money in the long rung.
But you seem to be in a bit of a pickle! Get the downpayment amount as high as you can.
Take a good look at your regular bills. Can you downsize anything to free up monthly cash?
Have you had an auto loan in the past? (Some pay cash for used cars, some "inherit" cars....etc) If so, did you ever have any lates on it?
You may not be able to get great financing....right now. You may be stuck with higher rates and a lower avaialble loan amount. Be prepared to shop around for quality used cars to find things in your price range.
Don't forget to factor in the insurance cost of a vehicle with a lein.
As far as WHO or WHERE for the rates, each state will be different and your income/expenses etc paly a role. Try other credit unions, try your regular bank.
