Do I still need a co-signer?

My wife and I went to buy a new car at a chevy dealership and both of our credit scores are pretty bad. Hers is in the 400 and mine is in the 550 range. They used mine for that reason. Anyways, I had a auto loan for a truck I bought a while ago and the bank required the title for the truck and I never sent it to them. They in turn, deemed the loan "unsecured". I sold my truck and didn't pay the loan off (since it was deemed "unsecured") to build my credit back up. On my credit report it say's "auto loan." Therefore when the dealership tried to get me approved for a loan, they told me that I needed a co-signer. They said it was because the bank they were trying to get me a loan through needed justification for two vehicles. Now if I was to pay the old vehicle loan off, would I not need a co-signer?