The strong January numbers came even though higher Social Security taxes cut take-home pay for most Americans. Taxes rose after a 2-percent cut in Social Security taxes, in place for two years, expired Jan. 1.
January sales might have been even higher without the tax increase, said Jesse Toprak, vice president of industry analysts at the car pricing site TrueCar.com. He said the increase is costing the average new car buyer -- those with a household income between $70,000 and $100,000 per year -- around $300 per month.
"That's almost a car payment," he said.
Analyst forecasts for 2013 are in the 15 million to 15.5 million range. Although still far from the recent peak of about 17 million in 2005, the industry could sell a whopping 5 million more cars and trucks than it did in 2009, the worst year in at least three decades.
At Ford, January's sales growth was led by the newly redesigned Fusion midsize car, which saw a 65 percent increase. Explorer SUV sales rose 46 percent. Sales of the F-Series pickup truck, the top-selling vehicle in the U.S., rose 22 percent. (Read More: Ford Earnings Is Tale of Two Companies)
GM's Chevrolet Silverado and GMC Sierra each saw increases of over 30 percent while sales of the Ram pickup, Chrysler's top-selling vehicle, rose 14 percent from a year earlier. Those gains give a strong indication that businesses are replacing aging pickup trucks that they kept through the Great Recession.
Kurt McNeil, GM's vice president of sales operations, said the company noticed a 37 percent increase in sales to small businesses like building contractors, who normally buy pickup trucks.
Analysts say sales for the month should exceed 1 million vehicles and are likely to be 8 percent to 15 percent higher than a year earlier.
Jackson, whose chain reported record fourth-quarter earnings on Thursday, feared a hangover last month from the strong finish to 2012. But he said people who focused on paying down debt the past few years are now making big-ticket purchases at a robust pace.
Consumers are saying: "I'm moving ahead with my life. I'm getting a new vehicle," Jackson said.
Buyers crowded dealerships even though incentives weren't as good as last year. The auto industry spent 8 percent less on discounts last month than it did a year earlier, according to TrueCar.com. Of all major automakers, only Hyundai and Volkswagen raised incentives from what they spent in January 2012, TrueCar said.
But that could change later in the year as automakers are expected to compete for sales with new vehicles and better deals.
Other automakers reporting sales Friday:
-- Honda's sales were up 12.8 percent rise to 93,626 sales.
-- Nissan's sales rose 2 percent. Sales of the newly redesigned Pathfinder SUV, which went on sale in November, more than tripled over last January. The new Sentra also saw big sales gains.
-- Hyundai's sales rose 2 percent, with a 24 percent increase in Elantra small car sales helping outweigh an 8 percent decline for the midsize Sonata. Hyundai said it was a record January for its U.S. sales.
-- Volkswagen's sales grew 7 percent. That was slower than the company's 31-percent sales growth last January, but it was still the company's best January in the U.S. since 1974. Passat midsize sedan sales rose 40 percent.