But what is more encouraging is that there appears no end in sight to the sales momentum, observers said Thursday.

Sales for the month improved nearly 8% year-over-year, hitting a new sales record of 135,052. That was 128 more vehicles than the previous peak in 2002, said Carlos Gomes, Bank of Nova Scotia’s senior economist.

 As a result, auto sales hit an annualized rate of 1.7 million units year-to-date after October sales outpaced the year-to-date gains of 7%.

“Part of it might be incentives out there,” Mr. Gomes said in an interview. “The other part is all these fuel-efficient vehicles in the marketplace is causing people to jump back in.”

He noted compact car sales increased 16% year-over-year, driven by an 18% increase in car sales from the Detroit Three — their strongest gains since the summer of 2011.

Ford Motor Co. remained the sales leader for the month and year-to-date; its sales advanced more than 7%. General Motors Co. took second place despite a 4.6% drop in sales compared to a year ago. GM outsold Chrysler Group LLC whose own sales improved 2%, 18,651 units versus 17,333 respectively.

Chrysler, however, remains No. 2 in the sales race year-to-date with a 14.6% market share, compared to 13.5% for GM. Ford holds a commanding lead at 16.6%.But it wasn’t just in Canada that cars and trucks were flying off the lots.

Despite the economic uncertainty in the U.S., sales there hit their highest point for October since 2007, driven by improved consumer confidence that more than offset an estimated 300,000-unit reduction in annualized sales resulting from Hurricane Sandy, Mr. Gomes said.

“A sales acceleration is likely in coming months, as U.S. consumer confidence jumped last month to the highest level since February 2008,” he said. “The number of Americans indicating they plan to buy a new vehicle is currently at the highest level since the tech bubble of the late 1990s.”

Dennis DesRosiers, president of DesRosiers Automotive Consultants, noted luxury brands continued to sell well in Canada last month. While BMW remained the No. 1 luxury brand, Porsche had the strongest year-over-year improvement of any automaker with sales up nearly 117% during the month. Albeit, he noted, on relatively small volumes.

“This incredibly positive market performance by the automotive sector should also continue as far out as we can see,” Mr. DesRosiers said in a note to clients. “Almost all metrics point to improvement for the next four (and possibly five or six) years.”

He said that barring unexpected economic shock, a new annual sales record could be achieved in the next few years in Canada, and an annualized rate approaching 1.8 million units could be achieved this decade.