Richard Rojas, 26, a US navy veteran who was arrested twice previously for drunk driving, is now in custody.
He also said he expected to die, the sources told AP news agency.
According to Reuters, he said after being arrested: "You were supposed to shoot me! I wanted to kill them."
The woman who died was 18 years old. Her name was Alyssa Elsman and she had been visiting from Michigan with her family.
Her 13-year-old sister was also hit and injured.
The burgundy Honda sedan jumped the kerb at 45th Street and Broadway at 11:55 local time (15:55 GMT) and drove at high speed for three blocks before crashing into a pole.
It came to a standstill with smoke and flames escaping the bonnet.
READ MORE: PHOTOS: Times Square chaos as speeding car ploughs into crowds leaving girl, 18, dead and injuring 22 others
The incident evoked recent terrorist attacks by vehicle in London, Nice and Berlin but New York mayor Bill de Blasio said there was "no indication" it was an act of terrorism.
Police believe Mr Rojas was high on synthetic marijuana, known as K2, ABC News reports, citing law enforcement sources.
Initial tests reportedly came back negative for alcohol but positive for drugs.
Reports in US media say he has a history of arrests, including for some aggressive or violent incidents.
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